The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This paper reviews economic developments in the Islamic Republic of Iran during 1990-96. Iran experienced heightened macroeconomic instability in the first quarter of 1995/96. Among the contributing factors, the announcement by the United States of intensification and extension of sanctions had a pronounced negative impact on expectations. This triggered a run on the foreign exchange market and buying in the goods market. The free market exchange rate shot to Rls 6,200 per US$1 and consumer prices rose by 14 percent during April-May, which raised the 12-month consumer price inflation to 59 percent in May.