Iran's currency market problems can be solved by reforming policies

Business Materials 10 July 2020 18:51 (UTC +04:00)
Iran's currency market problems can be solved by reforming policies

TEHRAN, Iran, July 10


Iran's foreign currency market problems can be solved by reforming policies, said professor of the economics at Allameh Tabataba'i University.

Mohammad Gholi Yusefi has discussed the increase of foreign currency rate in an interview with Trend.

"Foreign currency in global market follows supply and demand, but the situation is different in Iran since the economy is public. In the countries such as Iran that export oil, the state intervenes in economy, the costs and inflation increase, which eventually leads to devaluation of national currency and increase the foreign currency rates," Gholi Yusefi said.

"In addition to coronavirus, sanctions and economic crisis further aggravated the situation in Iran and affected the foreign currency rates. Iran's economy is not productive and domestic supply is little; therefore, there is a need to spend more import, which also led to increase foreign currency rates," the professor added.

"Foreign currency supply is not sufficient, while oil export and foreign currency revenues have declined, while the country still needs to import. Thus, if nothing changes, the situation will remain the same, and we will certainly witness further increase in foreign currency rate, unless the government finds another way, but this is unlikely," he said.

"If this situation continues and there will be further devaluation of national currency, Iran is to become a country like Venezuela," he added. "This has to be prevented before it is too late. The best solution is to review the policies, make serious decisions and adopt long-term plans alongside reforming the constitution and developing constructive relations with the world," he noted.

The professor went on to say: "The country should not always be in stress and crisis. Although there are some individuals who gain from this situation, the authorities should implement a policy that calms the atmosphere."

"The country's situation is not improving; it is getting worse day by day. To prevent further decline, the policies shall be thoroughly reviewed, while the authorities shall take firm decisions at this critical stage," he added.