Foreign currency rate in Iran complicated, affects all economic sectors - former minister

Business Materials 18 December 2013 11:58 (UTC +04:00)

Baku, Azerbaijan, Dec. 18

By Umid Niayesh, Saeed Isayev - Trend:

Foreign currency rate in Iran is complicated, and it affects all of country's economic sectors, Iran's former economy minister, current head of Tehran Chamber of Commerce, Industries, Mines and Agriculture, Yahya Ale-eshagh told Trend on Dec. 18.

The last available foreign currency rate in Iran stood at 29,450 rials/USD at the free markets.

"Based on the current conditions of Iran's economy, the real U.S. dollar exchange rate is about 28,000 to 30,000 rials," Ale-eshagh said.

He went on to add that the USD rate in Iran is balanced, and should be specified by the country's economic circumstances.

Iran's national currency the rial, lost about 50 percent of its foreign exchange value in less than a week in October 2012, standing at 35,500 versus the dollar. It was close to 10,000 in early 2011.

Last September, the visit of Iranian President Hassan Rouhani to New York created a positive psychological atmosphere in the market, as the exchange rates on the free market went down to 29,500 rials/USD.

At that time, Iranian central bank governor, Valiollah Seif argued that the USD exchange rate in Iran is reasonable at 30,000 rials/USD, and any further fall of the rate will be harmful to the Iranian economy.

After the statement, Iranian economists and officials assessed the situation differently - some expressed support to Iranian Central Bank's policy, while others criticized it for preventing the fall of the USD rate.

On September 27, member of the chamber's board of directors Masoud Daneshmand said that Iran's chamber of commerce, industry, and mining will not allow the US dollar to fall below 30,000 rials.

Yahya Ale-eshagh noted that the high USD rate is an advantage for Iranian exporters, and a disadvantage for the country's importers.

"Iranian government also benefits from the increase of the foreign currency rate, so can it earn more rials against the USD," he said.

Former minister went on to add that people working in the industrial sector benefit from the fall of the USD price, as do the citizens of Iran.

Ale-eshagh underlined that the current rate should be kept stable.

"The administration plans to stabilize the USD exchange rate and supply single-rate dollar at the current level."