Call for Boosting Interest Rate to Curb Forex Crisis

EghtesadOnline: The rising value of foreign exchange against the rial has been a cause for serious concern in recent months.

News ID: ۷۵۲۳۳۴

10 March 2023

The rising value of foreign exchange against the rial has been a cause for serious concern in recent months.

Regardless of the inflationary consequences of this growth, public anxiety can lead to an increase in speculative practices and demand for foreign currency and gold markets. We need to acknowledge that the economy has seen a currency shock; policymakers need to give an appropriate reaction instead of just analyzing its origin. The same crisis happened during the terms of former presidents Akbar Hashemi Rafsanjani, Mahmoud Ahmadinejad and Hassan Rouhani. The response of all of them was similar and ineffective. It seems that the current administration is playing the same card, i.e., selling gold coins to each ID card holder in the hope of reducing gold prices and exchange rates at prices lower than the open market rate. This will be a costly move that will only empty the government’s coffers.

Ali Sarzaeem, an economist, prefaced his write-up for the Persian daily Donya-e-Eqtesad with these words.