Forex crisis and smuggling predicament in Iran

Forex crisis and smuggling predicament in Iran

Dalga Khatinoglu, Trend's Iran News Service Chief

Iran has announced that imports of computer and related components are allowed for import again, several days after the prices on these goods jumped up by 5 times, as a result of administration's decision to ban imports of some luxury goods, including clothing, cell phones, and computer parts.

Iran has been grappling with the problems of decreasing oil exports by one million barrels, and accepting Euro and Dollar for selling oil after U.S. and the EU enforced a new round of sanctions as of June 28 and July 1, aiming to cut the Islamic Republic's oil revenues.

In March, Iranian Finance and Economic Affairs Minister Shamseddin Hosseini announced the country's foreign exchange reserves at $100 billion. This is while the International Monetary Fund estimated that Iran's forex reserves fell to $70-80 billion last year.

Meanwhile, the administration has said that $18 billion of the reserves are the hands of people. Although the amount of Iran's forex reserves in the current year is unknown, the categorization and prioritization of imports, the shortage of dollar for importing highly strategic goods, such as medicine, and the 80-percent rise in the price of dollar against rial during the past year, indicate that Iran's forex reserves are not in good condition.

Industry, Mine, and Trade Minister Mehdi Ghazanfari has announced that some $12 billion worth of luxury goods is imported legally per year.

Even if Iran succeeds in stopping legal imports of so-called luxury goods, it will face two serious problems. The first will be the psychological effect in the market and the sharp rise in prices of some of the goods, such as computers, cell phones, and clothing, which have been banned to be imported, and the second will be the rise of such smuggled goods.

According to official statistics, annually around $20 billion worth of goods have been smuggled into the country in recent years. The Iranian government has claimed that the above mentioned figure reduced to $14 billion past year.

However, Alireza Monadi-Sepidan, the member of the Majlis presiding board, told the Fars News Agency on October 5 that some $30 billion worth of goods is yearly smuggled into the country.

Moreover, Mohsen Bahrami Arz-Aqdas, the member of the Chamber of Commerce's trade committee, has said that imports of illegal goods into Iran surpassed $20 billion during March-August this year.

The volume of smuggled computers, cell phones and clothing has shown to be quite significant. Last year, Iranian Customs Administration director Abbas Memarnejad announced that 20 million cell phones should be annually supplied to the domestic market via import, however, smuggled cell phones accounted for over 95 percent of cell phones in the market in the Iranian year 1389, which ended in March 2011.

In January 2012, Mehdi Yekta the secretary of the union of Iranian textile and leather exporters also told the Fars News Agency that some $8.5 billion worth of clothing is illegally imported into the country each year, accounting for about 70 percent of the total imported clothing.

The Tehran computer market is full of low-quality and unguaranteed smuggled computer components, mainly manufactured in China. According to the Mehr News Agency, over 410,000 low-quality Chinese-made smuggled computer components were seized in the Iranian year which ended in March 2011.

This huge volume of smuggled goods, plus the reduction in oil exports which makes for 20 percent of the state budget of $460 billion and 80 percent of Iran's forex income, as well as the problem of receiving the money for selling oil in euro and dollar, has put Iran's forex reserves at serious risk.

The ban on imports of luxury goods not only will lead to a surge in their prices, but also will add to their illegal imports, because in today's world, cell phones, computers and clothing are among the most used goods in the society.

COVID-19 kills 144 more Iranians over past 24 hours
COVID-19 kills 144 more Iranians over past 24 hours
U.S. charges three Iranians over satellite tech firm hacking
U.S. charges three Iranians over satellite tech firm hacking
Iran's Cyber Police confronts online scam vaccine ads
Iran's Cyber Police confronts online scam vaccine ads
Loading Bars
Uzbekistan to include goods and services in Unified Electronic Catalog
Kazakhstan's oil & gas company opens tender to buy filter blocks
Azerbaijani Central Bank unveils number of borrowers with restructured loans
Georgia sees increase in COVID-19 cases
Production started at Uzbek gas condensate field
Japan, Uzbekistan to increase tourist flow between countries
Turkmen Ministry of Construction to purchase equipment from Italian company
Kazakhstan, Russia agree to resume mutual flights
Turkmenistan, Ukraine discuss trade, economic cooperation
Iranian currency rates for September 19
Number of coronavirus cases in Uzbekistan pass 50,000
Armenia violates ceasefire with Azerbaijan 36 times
Australia COVID-19 hotspot records fewest cases since June
Turkey summons Greek envoy over expletive headline against Erdoğan
E3 says Iran sanctions relief to continue beyond Sep. 20
Georgia sends armored medical evacuation vehicles to Indonesia
65 new COVID-19 infections reported in Kazakhstan over past day
UN, Kazakhstan intend substantially contribute to environmental resilience (INTERVIEW)
Japan's new PM Suga to meet with Pompeo in October
Chinese mainland reports 14 new imported COVID-19 cases
Brazil's COVID-19 death toll tops 135,000
French finance minister tests positive for COVID-19
Trump says he sees no reason to delay TikTok decision
Eleven more coronavirus patients die in Moscow in past day
Qatar reports 224 new COVID-19 cases, 122,917 in total
Kazakhstan's crude oil exports to India surge in 1H2020
Georgia to acquire 135 000 doses of flu vaccines in October
Istanbul introduces alternate working hours for public servants amid COVID-19 pandemic
Kazakhstan launches programming learning platform
UK PM Johnson says second wave of virus inevitable, new restrictions possible
Israel's daily new COVID-19 death cases hit record high
Iran, Russia stress promoting scientific, technological coop.
Kazakh company looking to establish medical cannabis production
Azerbaijan’s Baku to hold World Cups in three gymnastic disciplines in 2021
Georgia increases export of apples
Data on cargo movement from Albania via Turkish ports revealed
Deputy PM: 'Contract of the Century' - special among grandiose events in Azerbaijan's history
Minister: Azerbaijan - integral part of global energy security system
Spanish capital region orders partial lockdown in some COVID-hit areas
COVID-19 kills 144 more Iranians over past 24 hours
Representatives of Azerbaijani Karabakh community meet with ambassadors of several countries
Azerbaijan on Kazakhstan's list of 'safe' countries in terms of COVID-19 threat
Data on industrial production of Uzbekistan for January through August 2020
Net profit of Georgian insurance companies increases
Azerbaijan preparing proposals to develop hazelnut growth
Central Bank of Azerbaijan announces slow post-COVID economic recovery
Azerbaijan’s mining, IT companies sign tender contract
Georgian finance minister elected chairman of ADB board of governors
Baku Stock Exchange includes AzerGold's bonds in listing
Baku holds video conference entitled "Heritage of Caucasian Albania" (VIDEO)
Clients of Azerbaijan's bankrupt Standard Insurance receive compensations
Georgia continues projects of Winter resort in Gudauri
Turkish cement in great demand in Turkmenistan’s construction markets
Azerbaijani MP: Armenia's draft law on so-called "genocide" aims to deceive world community
Azerbaijani oil prices continue to grow
ENKA Renewables: Namakhvani HPP Cascade project to have substantial impact on property tax
BMB Trade Group develops project for livestock complex in Uzbekistan
U.S. current account deficit surges 52.9% in second quarter
Companies reserving capacity in IGB disclosed
Gold, silver prices in Azerbaijan rebound
Requirements to oil&gas service companies to be revised in Kazakhstan
Turkmenistan working to improve transport, customs systems
Firefighter dies in California wildfire - U.S. Forest Service
IGB to start commercial operations by July 2021
Germany to send observers for Georgia’s parliamentary elections
Iran expected to launch neobanks by 2021
S.Korean, Azerbaijani officials discuss healthcare co-op
Number of gas consumers increased in Turkmenistan’s Lebap region
Rami Levy said mulling withdrawal from Delek Israel deal
Azerbaijani economy ministry: Digitalization - important component of economic dev't
Azerbaijan confirms 135 more COVID-19 recoveries
Baku International Energy Charter Forum to be held online
Azerbaijan's oil pumping through BTC pipeline shrinks
International tourism restrictions to be canceled in Uzbekistan
Azerbaijani president congratulates president of Nepal
Sulfur production increases in Kazakhstan in Aug, 2020
Russia to invest in modernization of power generation field of Uzbekistan
Kazakhstan, Turkmenistan in talks on gas exports
Minister: Georgia moving towards period of adaptation
Average daily volume of gas production at Turkmenistan’s Uchaji field revealed
Azerbaijan Deposit Insurance Fund continues compensating depositors of closed banks
Azerbaijan raises propylene production
Georgia sees increase in hazelnuts exports
Pumps producer terminates memorandum with Kazakhstan's largest oil pipeline company
Kazakh coal extracting venture opens tender to buy vehicles
Iran's industrial production increases
French imports of leather goods from Turkey down
Georgia imports more steel from Turkey
Volume of delivered oil at Turkmenbashi Oil Refinery published
Azerbaijan unveils timeframe for commissioning road to highest mountainous village
Central Bank of Azerbaijan lowers interest rate
Azerbaijani ambassador talks Armenia's military provocation against Azerbaijan in popular US radio show
Iran and Pakistan discuss trade between border provinces
PETRONAS's upstream volumes to fall by about 4%
Ryanair cuts October capacity, blames travel restrictions
BMB Trade Group eyes to expand export products of Uzbekistan
“My Bakcell” – the ultimate solution for managing your account
EBRD to back up solar plant construction in Kazakhstan’s Karaganda
Kazakh Ministry of Ecology talks restrictions in industry sector
Georgia reveals volume of exported peaches and nectarines
All news