TEHRAN, Iran, Nov.13
Trend:
Supply and demand are the elements that affect the foreign currency rate in Iran, economist Ali Akbar Nikoo Eghbal told Trend.
"In terms of supply, it depends on return of export foreign revenues back to the country," he said.
"If the revenues from oil sale, oil products, mineral and steel products, saffron, pistachio export or tourism and medical services increases the country's foreign currency supply would rise. Now, if demand volume stays stable and export increases, the USD rate would decline and country's national currency value would rise," he said.
"Although this approach could be in reverse - exports would reduce and import stays stable or even increases, and this would lead to increase of demand to buy foreign currency and the shortage would lead to increase of USD rate and devaluation of national currency," he said.
"It should be noted that political changes and foreign pressures could limit country's access to markets and banking transactions. In this situation foreign currency supply would decline and the USD rate would increase unless domestic demand for foreign currencies would reduce simultaneously," he said.
"The element that affect the demand for foreign currencies is import. Demand for importing necessary goods, basic materials or semi produced, medical equipment would lead to outflow of foreign currency from the country to purchase import," he said.
"Devaluation of national currency rate means cheaper domestic products for foreign buyers and overpriced imported goods so it could be a sign for production structures to adapt and improve production," she said.
"The balance between capital outflow and bringing investments to the country is negative in Iran and the estimated annual capital outflow from Iran is between $20 to $30 billion that would cause the increase of foreign currency rate and further devaluation of rial," she said.
"Although the country's monetary and industrial policies were also effective and caused the decline of foreign revenues, budget deficit and inflation," she said.
"Inflation and its consequences includes constant devaluation of national currency," she said.