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Possible that frail US-EU relations affected Iran's foreign currency rate - expert

Finance Materials 28 November 2018 09:38
Possible that frail US-EU relations affected Iran's foreign currency rate - expert

Tehran, Iran, Nov.28

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Iran foreign currency market has witnessed a drop in the rates during past weeks, according to an expert in the Iran Chamber of Commerce.

The collapse was influenced by political environment in the country, while the economic parameters had less of effect on the decline of rates, said Adnan Mousapour, the head of the Export Development Committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), ISNA reported.

"Regarding the current economic situation in the country, the factors that caused the hikes and the critical conditions in the foreign currency market during the past months still exist. However it is possible the frail relation between US and the EU lead to foreign currency drop," Mousapour said.

The Iranian national currency (rial) has rebounded recently due to CBI interventions on foreign currency rates.

The devaluation of rial has previously led to frenzy in the currency market where people invested their money in gold, foreign currencies and other properties.

"The other reason that caused the foreign currency drop was the Central Bank of Iran (CBI) policy to change the process of currency return from export revenues in the Integrated Forex Exchange System (NIMA) and issue of exemption for exporters' currency exchange, in order to increase the hard currency revenues. Thus, all these factors have lead to decline of foreign currency rate," said Mousapour.

The Central Bank of Iran (CBI) issued the instructions on return details of the foreign currency earned by exporters into the domestic financial system NIMA.

Depending on the exports revenue, the CBI offered exemption on the portion of foreign currency being returned to the system.

Mousapour noted that drop of foreign currency rate and its consistency is what economic activists desire.

He expressed hope that the rates decline further more or just remain at the same level and be more predictable.

"Currently the country's economic future is ambiguous for economic activists since they demand stable rates with less turbulence,” he said.

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