EghtesadOnline: The government has allocated $15 billion of foreign exchange to imports in the 50 days since the start of the current Iranian year on March 21.
According to Government Spokesman Mohammad Baqer Nobakht, out of this amount, $8.7 billion have been paid to importers.
Nobakht, who was speaking in a late-night TV newscast, said the country’s exports are 22% more than the imports, which is indicative of the country’s stable forex position, IBENA reported.
The government decided to unify the US dollar’s exchange rate at 42,000 rials on April 9 in response to volatility that saw the rial sink to all-time lows against the greenback, according to Financial Tribune.
A similar attempt to unify the exchange rate in 2012 fell flat when the rate was fixed at 12,260 rials without due attention to market mechanisms. Although analysts object to the current rate as unrealistic, its flexibility has provided a relative relief for pro-market forces.
The Central Bank of Iran has only allowed minor increases to the rate so far. As of Wednesday, the bank put the rate at 42,270 rials.
According to CBI measures, the US dollar for all purposes, including imports, travel, overseas students and research projects, will be offered by the government at the unified rate.
The announcement was later followed by other measures approved by the Cabinet and subsequently notified by CBI.
However, the significant gap between the official rate and the black market rate (hovering around 65,000 rials) has led to a deluge of request for cheap currency, which many believe the government would not be able to comply.
Unofficial news that the government may be softening its approach on the unified rate and may recognize the black market rate for certain imports, sent the stock market higher on Wednesday. Tehran Stock Exchanges main index rose 2.87% in midday trading.
“As announced by the World Bank, the Islamic Republic of Iran’s foreign exchange reserves are over $100 billion and the Gross National Product has also been forecast at $85 billion, which is more than in the previous year,” Nobakht said.
Forex, Gold Stability
The spokesman said the government is committed to supporting domestic manufacturing and curbing the inflation and also providing exporters and importers with hard currency at the unified rate.
He said the CBI has supplied its presold gold coins on time and the current price surge is the result of uncertainty in the market.
Nobakht asked the people to help stabilize the gold coin and forex markets.
The benchmark Bahar Azadi coin, which has surpassed the psychological threshold of 25 million rials was up again on Wednesday and changed hands at 25.43 million rials.
On Tuesday, CBI Governor Valiollah Seif noted that the current situation in the gold market is mostly rooted in psychological issues and would “go away gradually”.
According to the World Gold Council’s latest report published days ago, Iranians’ demand for gold coins and bars reached a three-year high in the first quarter of 2018.
Expecting a further slide in the value of rial to 7,000 per US dollar as the prospect of sanctions loom, investors have scrambled to buy gold coin to hedge their bets.
A ban on the physical trade of foreign currencies by exchange shops and limits on the possession of foreign exchange have been cited as other reasons for the rally by analysts.
Nobakht also referred to the US pullout from the Iran nuclear deal and reimposition of US sanctions, saying that it would have a “price” for Iran and that the country needs the help of friendly neighboring countries involved in the agreement to cope with the new situation.
US President Donald Trump pulled out of the international nuclear deal with Iran on May 8 and said he would reimpose sanctions within 180 days, prompting several European companies to announce they would end business with Tehran before the Nov. 4 deadline.