Iranian expert: National currency’s value can be increased by supporting production

Iran Materials 19 January 2019 12:36 (UTC +04:00)

Baku, Azerbaijan, Jan. 19

By Elnur Baghishov - Trend:

The value of Iran’s national currency can be increased by strengthening local production, not by slashing four zeros from the currency, Iranian economy expert Akbar Abdulbari Mohammadi told ISNA, Trend reports.

He said that the current tense economic situation isn’t suitable for the removal of four zeros from the national currency. Actually, keeping liquidity and inflation under control is more important, he noted.

He added that the Iranian government has put forward a number of reasons for the removal of four zeros from the national currency and said that it doesn’t have an impact on the economy and inflation. However, it has an effective psychological effect, and it is also effective for calculating the national currency compared to foreign currency, he said.

“What makes us seriously think so is that slashing of four zeros wouldn’t lead to an increase in inflation, because in some Iranian districts, products and services are still sold at a cost below 10,000 rials,” he said.

“The government may create conditions for directing liquidity towards revenue-generating oil projects by setting up infrastructure for these projects,” he noted. “Thus, the government can control liquidity and inflation and protect the value of the national currency. The government and the parliament should help local production to bring revenues. Taxes, customs duties, inflation and a number of other factors exert pressure on local producers and significantly reduce the profitability of local production.”