General Discussion
In reply to the discussion: Gas shortage shutters Costco stations, prices skyrocket [View all]HiPointDem
(20,729 posts)on the rial.
If so, the iranians are paying a much greater price than you are. Talk to your government about it.
And it's not just california. I paid $4.18 tonight and it was about $4 last time i bought gas.
Since 2010, the United States has been steadily tightening sanctions on Iran. A good chunk of Irans $110 billion foreign exchange reserves is locked up in offshore accounts that are now frozen. Overseas banks have been barred from doing business with Irans central bank. And Iran is having trouble selling its oil abroad. Add it all up, and those sanctions have restricted the supply of dollars and other foreign currency reaching Iran.
This has made it extremely difficult for Irans central bank to maintain its currency peg of 12,260 rials to the dollar. Individuals and businesses are instead buying up scarce dollars and euros on the black market, often to pay for imports. As more Iranians try to trade their rials for (increasingly rare) foreign currency, dollars get pricier and the value of the rial drops.
That problem finally exploded last month. In the black markets, the value of Irans rial has now plunged 65 percent in the past few weeks. The dotted line on this stunning chart from Steve Hanke at the Cato Institute tracks the free-fall:
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/04/hyperinflation-finally-arrives-in-iran/