28 Mar 2024
Tuesday 28 May 2013 - 13:38
Story Code : 30276

Iran today: News from the economic front

While each Presidential candidate put out general remarks about how he will repair Iran's battered economy, the news continues to be bleak for the Islamic Republic.
Bahar reportsa new round of inflationfor key goods and adds that there are shortages of subsidised currency --- at "official" rates, under which the Iranian Rial is three times stronger compared to "open-market" rates --- for imports of essential food items.

Meanwhile, Mohammad-Reza Sabzalipour, the head of Iran's centre for exports, has pointed todeliberate currency manipulationamid the Rial's fall by 70% last year.

Sabzalipour said that the Government, facing a 300 trillion Rial ($24.5 billion deficit at official rates, but only $8.5 billion at open-market rate) in the 2013/14 budget, was selling foreign currencies such as US dollars to get "open-market" Rials and thus nominally reduce the deficit.

The Rial is officially at 12250:1 vs. the US dollar, but is selling at 36200:1 this week.

Other leading figures have said the issue is even greater. MP Gholamreza Mesbahi-Moqaddam, a leading member of Parliament's Economy Committee, claim last November that the Government faced a deficit of 540 trillion Rials, while MP Ahmad Tavakoli, a prominent critic of the Government, has claimed the deficit is 860 trillion Rials.

The Iranian currency and Government budget have been under pressure as oil income fell about 50% last year. Oil income accounts for 60% of Government revenues and 80% of total exports.

ByEnduring America

 

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