IMF experts propose revival of foreign exchange reserve

Tehran, Sept. 29, IRNA – The International Monetary Fund Article IV Consultation delegation presented a report on the budgetary and efficiency policies at the Central Bank of Iran proposing the revival of Foreign Exchange Reserve Fund.

Oliver Basdevant, a member of the delegation, said Iran’s budget is based on oil revenues and there are no budgetary buffers in it for preventing possible shocks, adding that therefore the first challenge is how to manage oil resources.

He referred to population pressures as the second challenge and noted that the this issue in coming years will become the main challenge in the field of employment, proposing that adoption of budgetary policies should cause investment and strengthening of the private sector.

Suggesting establishment of monetary buffers to support the budget against possible shocks, especially oil shocks, the IMF member proposed that the Foreign Exchange Reserve Fund should be revived and attention should be paid to issues such as transparency and clarification of risks while preparing the budget.

Meanwhile, Robert Blotvogel, another member of the delegation, commented over efficiency in Iran and said pointing out that sustainable efficiency can be useful for economic growth. He added it is necessary that limited financial and human resources should be directed towards parts of the economy with higher efficiency.

Saying that Iran’s banking system is faced with basic challenges due to doubtful accounts and outstanding claims, he stressed that increase in Iran’s share in oil exports is necessary.

Meanwhile, he added, improvement of the movement of the resources from sectors with low efficiency to sectors with high efficiency together with reforms in financial, labor, commodity and service markets should be emphasized.