Subsidized forex maintained in Iran’s 2020-21 budget

Financial Tribune – Despite persistent calls by economic experts and academia on the government to scrap subsidized currency allocations, it appears that the controversial forex policy to pay for importing basic goods, will be sustained in next year’s budget (March 2020-21).

Mohamadbaqer Nowbakhat, head of the Plan and Budget Organization, made the announcement Thursday in a talk with the parliamentary news website, ICANA.

Successive governments have allocated cheap foreign currency for importing essential goods for decades to avoid drastic price hikes in food and raw materials used by manufactures.

Under the present government the greenback is sold for 42,000 rials only to import selected and essential goods. This is while the dollar exchange rate in the open market is three-fold at about 124,000 rials.

“The parity rate will remain at 42,000 rials [for 1 USD] in the next budget bill” Nowbakhat said, reiterating that the government has no plan to increase the currency rates for budgeting needs.