A simple trip to the store in Iran these days offers a crash course in life under Western economic sanctions.
The prices of many imported goods — from South Korean refrigerators to Turkish crackers — can be double from last year. The money to buy them, meanwhile, has plunged in value against the U.S. dollar and other foreign currencies.
But there are no apparent shortages for those still willing to buy. Chinese products pour in to fill gaps left by European businesses and others that have left Iran's massive consumer market following economic sanctions over the Islamic Republic's refusal to rein in its nuclear program.
"You can find what you want," said Hasan Alaei, who imports food items mostly from China. "The problem is the cost of the imports have increased because of sanctions and the exchange rates."
It's places such as these — electronics stores, supermarkets, auto supply outlets, Tehran's vast bazaar — where the bite of sanctions is most visible even as the U.S. and Europe take aim at Iran's critical oil exports with new measures.
Cracks are showing in Iran's merchant class, the base of support for the Islamic system.
Importers are struggling with a slumping currency and suppliers are increasingly nervous about dealing with Iranian banks.
For Sharhriar Azadeh, owner of a shop that sells decorative items such as plastic flowers and glass figurines, it's meant raising prices between 30 percent and 50 percent because of the falling Iranian rial, which has been dragged down by a combination of panic over sanctions and government policies to sharply reduce bank interests that made holding rials less attractive.
The unofficial rate hovered around 18,000 rials to the dollar this week — down from a high of more than 23,000 last month but far from the rate of less than 11,000 about a year ago.
Siavash Yaghmaei, who runs an import-export business and works as a customs middleman, said Iranian businesses are being forced into a cash-only system because of concerns about the country's economic isolation.
"We can't get any letters of credit because of the banking restrictions," Yaghmaei said. "Our trade partners know that. So they demand cash. And they want 100 percent of the cash before shipping the items."
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