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EghtesadOnline: The Central Bank of Iran is expected to change its policy of giving foreign currencies to people traveling overseas at subsidized rates as soon as next week, in the face of growing public pressure and criticism.

“Based on negotiations, revisions are to be made regarding the allocation of government currency to outbound travelers by the central bank by the end of the current [Iranian] month [on July 22],” Yonathan Betkolia, a member of Majlis Development Commission, told IBENA.

He said the cheap currency allocation has “created an unfavorable trend by helping the growth of tourism industry in some neighboring nations”, in addition to encouraging black market activities as “many get the currency from the government and sell it in the black market”.

On Sunday, according to Financial Tribune, Ali Asghar Mounesan, the head of Iran’s Cultural Heritage, Handicrafts and Tourism Organization ,also voiced opposition to the government policy and called for reforms. He said the organization has been negotiating with CBI for a long time “and in the latest negotiations, it was agreed to reconsider and finalize the issue this week”.

At present, the government allocates €500 and €1,000 to people travelling to neighboring and distant countries respectively. This amount is only allocated to each person once a year, but it has also opened new avenues for profiteers.

The government’s travel currency is handed out at the unified rate of 43,000 rials, whereas the open market rate for the US dollar currently stands at 80,000 rials. 

Betkolia said the government should only give forex at the subsidized rate to those traveling for medical treatment and for the export of technical and engineering services.

“There is no need to offer official currency for tourism purposes,” he said. “Based on the new negotiations and CBI revisions before the end of the month, any currency that will help create employment and boost tourism in a destination country must be cut off.”

Betkolia concluded by saying that the government’s travel currency has made local tourism stagnant and strengthened black markets. 

 

Central Bank of Iran Iran Travel Currency Policy