Iran Gov’t forex subsidy policy censured

Financial Tribune – In a report on the controversial policy of the government to subsidize foreign currency for basic imports, the Majlis Research Center said it is ill-advised and a waste of scarce national resources.

The center highlighted deep flaws in the policy compared to its meager benefits and criticized the Rouhani administration for perpetuation of one policy that proved ineffective and chaotic in the past two years.

Drawing on the provisions of the budget bill for the next fiscal year (starts March 20), the parliamentary think tank said the government has proposed $10.5 billion in subsidized foreign currency for importing basic goods (food and medicine) and machinery.

A subsidized US dollar costs 42,000 rials but is priced around 154,000 rials in Tehran’s open market. The greenback is sold for 138,000 rials in the secondary market, known as Nima, which has been set up especially for import and export companies to buy and sell currency.