Tehran, Iran, Aug.21
Trend:
The mismanagement in Iran foreign currency market has caused the fluctuation of the currency and rise of abuses, Iranian economist Mahmoud Jamsaz told Trend.
"Some decisions such as lack of management in imports or reduction of the bank interest rate to 15 percent in 2017 forced people to transfer their capital to other markets such as , for example, gold market. This caused high inflation and increase of food prices," he said.
"When the price of dollar increased to 200,000 rial, the country's atmosphere became intense, so the official organizations attempted to bring back order to the market, as the government is the biggest supplier and customer of dollar in the market," he noted.
"The national development fund and the foreign currency reserve should predict when the foreign currency shock occurs,but they did not," he said. "Meanwhile, in this chaotic situation, 8,000 financial institutes and banks emerged in every corner and stole people's capital."
The economist believes that removal of four zeros from the national currency is due to fluctuation of foreign currency rate.
"One of the reasons for this issue is to avoid the devaluation of rial by rise of foreign currency rate, so that people will be less discontent. However, considering country's foreign currency needs, we will have foreign currency reserve for at least next Iranian year [starts March 21, 2020] and, if the current approach continues to be applied, the prices will increase more," he said.