Baku, Azerbaijan, Dec. 1
By Temkin Jafarov, Umid Niayesh - Trend:
Fluctuations in Iran's foreign currency market are emotional and transient, Iranian MP, Mohammad Alipour said Dec. 1.
Alipour who is a member of Iranian parliament's Economy Commission told Trend that in the past two years in particular after President Hassan Rouhani took office last year, Iran's exchange market was stable. He forecasted that the market will return to normal soon and will not face instability in the new future.
While there have been no particular developments in Iran's economy to cause any fluctuations, it is mainly due to emotional reasons in particular reacting to the fall in oil price, the MP said.
Iran's national currency has lost about 9 percent of its value versus the US dollar during the last week. On Dec. 1, each US dollar is sold at 35,200 rials in the Iran's open foreign currencies market.
During ex-President Mahmoud Ahmadinejad's second term, Iran's rial lost its value by about four times. Each USD was sold at 9,830 rials in 2009, but the figure reached 36, 000 in mid-2013 when Hassan Rouhani replaced Ahmadinejad.
The last 18 months of Rouhani's presidency, has brought some stability with the USD price in Iran's open markets around 31,000 to 32,000 rials, but during last week, the rial lost its value against the dollar significantly.
While responding to a question about effects of the fall in oil price on Iran's economy Alipour said that the decline in oil price can be handled by Iran's administration because the country's economy is great and already has experienced similar fluctuations. He said that for instance the government could decrease funds allocated for development projects or review cash subsidies by excluding high-income people from the payments.
It should be noted that the falling trend of oil price in global markets is expected to continue at least until the first quarter of 2015, according to some experts.
The OPEC oil basket price has fallen from $108 in June to about $70.8 on Nov.30. Iran's current fiscal year's budget was set based on $100/barrel and exporting 1.3 million barrels of crude oil per day. Iran's fiscal year will end on March 20, 2015, while according to a Reuters' report published on Nov.29, Iran's oil export to Asian markets during the first 10 months of 2014 is 1.1 million barrels per day. Iran also exports a little bit of oil to Turkey, but reportedly only about 0.1 mbpd.
Edited by CN