Reasons behind falling Iran’s exports to Iraq

Financial Tribune – Iran’s exports to the neighboring country Iraq have been on the decline since the last Iranian month (June 22-July 22), says secretary-general of Iran-Iraq Chamber of Commerce.

Hamid Hosseini added that the downward trend is rooted in several factors, including the gradual appreciation of Iran’s national currency, summertime heat and the government’s pressure on exporters to repatriate their earnings.

By the end of last Iranian year (March 19, 2019), the Iranian rial had lost about two-thirds of its value against the dollar, but regained some of the lost ground, which implies that exporters’ earnings have slightly diminished.

Amid dwindling currency reserves as a result of reimposed US sanctions aimed at choking Iran’s oil exports, the government issued a directive requiring exporters to return their export earnings to the Central Bank of Iran at an exchange rate set below market prices. This raised domestic exporters’ complaint as the move means less earning, much to their discouragement.