Iranian MP criticizes economy minister over currency devaluation

Business Materials 22 April 2018 17:57 (UTC +04:00)

Baku, Azerbaijan, April 22

By Farhad Daneshvar – Trend:

Iranian Economy Minister Masoud Karbasian has become under fierce criticism over the government’s recent monetary and financial policies.

“Mr. Karbasian must explain who they obtained the formula for increasing the rate of the currency by 15 percent and offering it at 42000 rials,” MP Amir Khojasteh told a parliamentary open session on Sunday.

The MP added that the prices of commodities in the domestic market have seen huge hike up to 50 percent following the devaluation of the national currency, Tasnim news agency reported.

The Iranian national currency, rial, gave up some 20 percent against the US dollar in the free market over the recent weeks. Therefore many rushed to hedge against depreciation of their assets amid fears over an imminent collapse of the nuclear deal and the return of economic sanctions.

Following the developments, First Vice-President Eshaq Jahangiri announced the government's decision to unify the country’s official and open market exchange rates.

Jahangiri, after an emergency cabinet meeting, appeared on TV to announce that the price of the US dollar would be 42,000 rials in both markets, and for all business activities, a 15 percent devaluation of the national currency.

The decision was made following recent fluctuations in the country after the rial declined to an all-time low and fell to 6,460 in early April on the unregulated currency market.

Psychological behavior, growth in demand, getting assets out of the country, political and diplomatic tensions, as well as security concerns and risk of military confrontation, are believed to be among the main reasons behind the sharp plunge of the value of Iran’s national currency.

MP Khojasteh also hinted that the efforts to unify the exchange rates have failed and currently the foreign currencies are offered at three different rates in the country.