EghtesadOnline: After the government elevated the status of tire companies' raw material imports to 'high priority', the Islamic Republic of Iran Customs Administration released a statement saying that the firms will be eligible for subsidized foreign currencies at the rate of 42,000 rials to the USD.
IRICA said the import of natural rubber or caoutchouc, which is the main raw material in tire production, will be subsidized. “Tire companies will be eligible for foreign currencies at the rate of 42,000 rials to the dollar for their import needs.”
According to the customs office allocation of subsidized hard currency to tire companies has become a priority.
Last week, the state-run radio and TV reported that the Industries Minister Reza Rahmani had called on the Central Bank of Iran to take immediate action to ease the import of raw materials needed for tire production, Financial Tribune reported.
Since the US re-sanctioned Iran, the national currency has lost 70% of its value and foreign currency rates have reached unprecedented highs. On Saturday the US dollar was traded at 114,000 rials in Tehran. The greenback was sold for 160,000 to 180,000 rials some weeks earlier. In March it hardly fetched 42,000 rials.
The volatility in the currency market forced the government to preserve its foreign currency reserves and introduce a multitier system for allocation of subsidized currency for imports.
The raw material imported by tire companies was initially in the second priority list not eligible for subsidized foreign currency. But in recent months when the rial tanked and tire prices jumped to unprecedented highs (especially for heavy vehicles) the government was forced to rewrite its forex policy for the tire industry.