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Iran reveals policies to curb inflation

Business Materials 17 May 2013 12:24 (UTC +04:00)
Iranian Central Bank Governor Mahmoud Bahmani has said the country hopes to curb inflation by adopting three financial policies.

Azerbaijan, Baku, May.17/ Trend F.Karimov/

Iranian Central Bank Governor Mahmoud Bahmani has said the country hopes to curb inflation by adopting three financial policies.

By selling bonds and gold coins, as well as reducing liquidity, we are hoping to curb inflation, Mehr news agency quoted Bahmani as saying.

Bahmani also said that gold has been purchased and reserved sufficiently for 15 years and that there is no problem in this regard.

Some $3 billion has been injected to the Forex Centre during the past month and $2 billion has been allocated for importing staple foods, he noted.

The Tehran Forex Centre was officially inaugurated on September 24, 2012. It allows importers of goods to buy dollars at a rate two per cent cheaper than the street rate at any given time.

Meanwhile, the government maintains an official reference rate of 12,260 rials to the dollar.

The Iranian government plans to use revenues from petrochemical sales and 14.5 per cent of its oil revenues to provide dollars for the centre, Central Bank Governor Mahmoud Bahmani said in September, 2012.

Iran's inflation rate reached 38.7 per cent in the first month of the current Iranian calendar year (March 21-April 20), the Mehr News agency reported, citing the Statistics Centre of Iran.

Inflation in Iran amounted to 25.4 per cent on average during the past Iranian calendar year.

The inflation rate increased from 21.8 per cent in the first calendar month of Farvardin to 31.5 per cent in the final month of Esfand, according to the report. Growth in liquidity and foreign currency exchange rates were probably the main causes of inflation rise.

In December 2012, IRNA quoted Finance and Economic Affairs Minister Shamseddin Hosseini as saying that the Iranian administration has special plans to curb a probable surge in inflation during the final months of the current Iranian calendar year, ending on March 20, 2013.

Since recent rises in the prices of goods are in close relation with rises in foreign currency rates, so we should rein in foreign currency shocks, he added.

The International Monetary Fund said on April 16 that Iran's economy contracted by 1.9 per cent in 2012 and is expected to shrink by 1.3 per cent this year as it reels from the impact of Western sanctions.

The economy of the Islamic republic is, however, forecast to grow next year by 1.1 per cent, the IMF said in its annual World Economic Outlook.

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