EghtesadOnline: Following the hike in the dollar exchange rate in Iran which has perturbed the public and driven commodity prices to unprecedented highs, some mobile importers have turned to profiteering to make big bucks out of the public distress. Tehran’s prosecutor has ordered the confiscation of 100,000 smartphones from the culprits in an attempt to help regulate the disturbed market.
After the government of President Hassan Rouhani decided to allocate subsidized currency to certain businesses to mitigate the impact of a sharp fall in the value of the rial, 40 importers capitalized on the hard currency to bring in handsets which they later sold at exorbitant prices, reported CITNA.
During recent weeks, prices of mobile phones have skyrocketed, with customers visiting technology shopping centers facing empty racks. Furthermore, online retail behemoths like Digikala have reported that a large number of models are unavailable on the market altogether.
Tehran Prosecutor Abbas Jafari Dolatabadi says they are investigating a case of profiteering by 40 cellphone importers and have confiscated 100,000 devices, Financial Tribune reported.
Dolatabadi adds, “The companies have used subsidized currency to import 400,000 mobile phones, out of which 100,000 have been seized and the remaining 300,000 mobiles were already sold to the public.”
Following US President Donald Trump’s decision in May to pull the US out of the historic 2015 Iran nuclear deal, the value of the rial plunged to unprecedented lows propelling Rouhani’s administration to design a system for the allocation of subsidized currency for certain products.
The government has launched an online platform named the Forex Deals Integrated System, locally known as Nima, through which importers can declare their foreign currency needs, and exporters—including the government as oil exporter—register their foreign currency proceeds. Through the system, banks and money exchangers are to act as mediators.
Nima was supposed to help the Central Bank of Iran exert oversight and have better control over market supply and demand.
In reality, according to market insiders, the system has turned into a corruption hotbed that allowed racketeers to exploit the fluctuations in the forex market and give the population a raw deal.
Tehran’s prosecutor says they have questioned 36 mobile importers in regard with the case.
Rush to Rescue
ICT Minister Mohammad Javad Azari-Jahromi also spoke about the ongoing case, detailing the government’s plan for the 100,000 confiscated phones.
According to the minister, they have provided all the information requested by the judiciary and are appreciative of their strict approach to the matter.
Azari-Jahromi also told reporters that recently introduced regulations will hopefully assuage customer fears and soothe the market to some extent.
By new regulations, the ICT minister is referring to the Industries Ministry’s latest directive which divides mobile phones into two groups based on their price.
In order to curb imports and save the country’s foreign currency reserves from total depletion, the government has categorized imported items and prioritized their entry into the country through a multi-tiered system. According to the latest directives, mobile phones fall in the second and third tiers.
Mobile phones priced below $300 fall into the second tier, labeled as “intermediate goods” which are allocated 43,000 rial dollars. The hard currency needs of importers of such goods are to be met from the export earnings of petrochemicals, steels and mineral products.
Mobile phones priced above $300 fall into the third group of commodities called “non-essential consumer goods” with the importers allowed to purchase hard currencies at the open market price. While a definite value cannot be set for the dollar exchange rate in the market, the currency is said to exchange hands at 80,000 to 90,000 rials.
The measure is expected to push up the price of flagship mobile phones—which are normally worth higher and over $300—to unprecedented highs. However, Azari-Jahromi says the regulation will bring back some stability to the market.