MP: Management failures cause tumult on Iranian market

Business Materials 25 January 2012 15:26 (UTC +04:00)

Azerbaijan, Baku, Jan. 25/ Trend M. Moezzi

The turmoil in Iran's foreign currency and gold markets isn't due to a lack of reserves, it's because emotions are ruling the market, Fars News Agency reported quoting a member of Iran parliament's economic commission Gholamreza Mesbahi Moghadamas as saying.

"The government has no shortage of gold or foreign currency and manufacturers can easily have access to the money by opening a letter of credit, "Moghadam said.

What has really caused the sharp increase in foreign currency and gold coins' value has been the Central Bank of Iran's (CBI) failure to respond to market's demands. When the CBI didn't manage the market's demands, businessmen and manufacturers began to panic and this allowed speculators to exploit the conditions.

In response to rumours that Iran's government had deliberately caused the recent market upheavals, Moghadam said the damage done to the country's economy and standing was far greater than anything it could gain.

"The delay in making a decision about the proposal to set deposit interest rates above the inflation rate has added to the market's instability," Moghadam noted.