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Removal of subsidized US dollar in Iran to help unify exchange rates?

Business Materials 15 September 2017 23:59 (UTC +04:00)
A recent decision by the Central Bank of Iran (CBI) on removing the government subsidy for foreign currencies offered to Iranian tourists could be an indication of a serious will to adopt policies on the unification of the currency rates, a Norway-based market expert told Trend.
Removal of subsidized US dollar in Iran to help unify exchange rates?

Baku, Azerbaijan, Sep. 14

By Khalid Kazimov – Trend:

A recent decision by the Central Bank of Iran (CBI) on removing the government subsidy for foreign currencies offered to Iranian tourists could be an indication of a serious will to adopt policies on the unification of the currency rates, a Norway-based market expert told Trend.

"It appears that the government has no concerns over the diplomatic threats and President Hassan Rouhani has put the policy of unifying the country's official and open market exchange rates on the agenda," Mehrdad Seyyed Asgari, a Norway-based analyst, told Trend.

Under a previous regulation, banks were offering foreign currency with a cap of $300 to Iranian travelers at official rates that were about 5000 rials lower for each dollar compared to the open market rates. The CBI earlier this month urged the banks to stop offering subsidized currency to travelers.

"The decision could be interpreted as an agreement reached behind closed doors to control political crisis in the country. However, there is no evidence to prove such a claim. This could be good news for the normalization of the market," Asgari added.

Gholamali Kamyab, the foreign exchange deputy at the Central Bank of Iran (CBI) suggested on Monday that his organization may adopt its policies on the unification of the exchange rate as of March.

There is about a 15-percent difference between the official and free market exchange rates of the US dollar in the current situation in Iran.

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