Iran says food prices to jump as currency subsidies end
Prices of basic goods in Iran are expected to rise by 20% to 30% in the coming weeks, with sharper increases likely for chicken, eggs and cooking oil, government spokesperson said on Monday.
Prices of basic goods in Iran are expected to rise by 20% to 30% in the coming weeks, with sharper increases likely for chicken, eggs and cooking oil, government spokesperson said on Monday.
Fatemeh Mohajerani said the increase was the result of the government’s decision to end subsidized dollars for essential imports in an effort to stabilize the foreign exchange market and curb corruption, a move that has pushed up the local-currency cost of imports of goods and raw material.
“It is evident that by ending or reducing subsidized and preferential official foreign currency exchange rates, the prices of some items will rise,” she said.
Earlier on Monday, parliament said it had approved the general outlines of the budget for the next Iranian year, which begins in March, after the bill was initially rejected and subsequently amended by the government.
The government described the changes as reforms aimed at improving livelihoods, as authorities seek to ease ongoing anti-government protests and strikes.
The revisions are said to include a pay rise of up to 43% instead of 20%, a cut in value-added tax to 10% from 12%, and the allocation of $8.8 billion in subsidized foreign exchange to curb price rises for basic goods.
The budget was also reported to earmark funds for guaranteed wheat purchases to supply bread and for adjusting pensioners’ salaries.
Lawmakers approved the budget framework with 171 votes in favor, 69 against and six abstentions, out of 246 lawmakers present.
Meanwhile, nationwide protests entered a ninth day on Monday, with merchant strikes continuing in parts of the country.
The unrest began after the rial fell to record lows in late December and has since broadened into a wider test of the government’s ability to manage a country under sustained economic strain.
“Anyone who had money in Venezuela has already taken it out,” Majidreza Hariri said, responding to concerns about Iranian assets worth an estimated two billion dollars.
He added that instability in Venezuela had been evident for at least five to six months, leaving ample time for Iranian funds to be withdrawn, and warned against attempts to use the crisis as a pretext to write off debts.
He said Iran-Venezuela Bank has not functioned as an effective commercial bank in recent years as financial transactions between the two countries were not conducted through this bank.
According to Iran’s foreign ministry on Monday, economic and diplomatic relations with Venezuela remain intact in the wake of Maduro’s arrest, and political developments do not automatically alter bilateral ties.
“Relations between states are based on mutual respect and interests,” said spokesperson Esmail Baghaei earlier in the day.
He said Iranian diplomats and citizens in Venezuela are safe and that Tehran continues to monitor the situation closely.
“A number of agitated people, enemy mercenaries, had positioned themselves behind bazaar merchants and chanted slogans against Islam, against Iran and against the Islamic Republic,” Ali Khamenei said, according to state media.
“Protest is legitimate, but protest is different from rioting,” Khamenei added. “Officials should speak with protesters. Speaking with a rioter is pointless. Rioters must be put in their place,” he said.
The comments marked Khamenei’s first public response to the latest wave of demonstrations, which have intensified amid economic strain and currency volatility.
Khamenei’s language echoed his stance during earlier nationwide protests, including the 2022 “Woman, Life, Freedom” uprising and demonstrations in November 2019, when security forces used lethal force to suppress unrest.
At least eight protesters have been killed so far after being shot by security forces during the current unrest, according to human rights groups. Independent organizations, including Iran Human Rights Organization, previously documented 551 deaths – among them 68 children – during the 2022 protests.
Currency crisis blamed on ‘the enemy’
Khamenei also attributed the protests to economic grievances while assigning responsibility for the currency crisis to foreign adversaries. “These gatherings were mainly by bazaar merchants,” he said, adding that sharp and unstable exchange-rate swings were “not natural” and were “the work of the enemy.”
He accused unnamed actors of exploiting merchants’ complaints to cause “damage and insecurity,” saying such actions were “unacceptable.”
The remarks came as protesters in several cities have chanted for the overthrow of the Islamic Republic and mainly voiced support for the exiled prince Reza Pahlavi.
Confrontation with ‘the enemy’
Khamenei closed by insisting the Islamic Republic would not retreat. “The enemy will not sit quietly and uses every opportunity,” he said, adding that authorities “were and will be present in the field.”
On Friday, US President Donald Trump warned that if Iranian authorities shoot peaceful protesters, the United States would act to help the people.
"If Iran shots and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue. We are locked and loaded and ready to go," Trump wrote in a message published on his Truth Social account.
Iranian officials responded with warnings toward the United States and Israel.
