Tehran Chamber of Commerce Sends Forex Proposals to Gov’t

EghtesadOnline: Tehran Chamber of Commerce, Industries, Mines and Agriculture has sent a letter to President Hassan Rouhani, urging his administration to consider four private sector proposals for the recent forex measures to deliver positive results.

News ID: ۷۸۲۷۹۷

03 June 2018

In his letter, a copy of which was also sent to First Vice President Es'haq Jahangiri, Masoud Khansari first said that given the criticisms of the unified dollar exchange rate of 42,000 rials, the government should move to moderate it in line with inflation until the end of the current Iranian year (March 20, 2019).

Secondly, Khansari warns that the allocation of hard currency at the unified forex rate would exacerbate the existing problems of the government and the Central Bank of Iran since it would lead to higher demand for imports, IBENA reported.

"Therefore, it is suggested that the [unified forex rate] be used only for basic, essential and intermediate goods, and the rest of the imports be provided at negotiated rates from non-oil export earnings," the missive reads.

Thirdly, according to Financial Tribune, the TCCIM chief proposes that the government review its list of essential and basic goods and let the exchange shops–whose activities have been halted since the rate unification–step in to provide hard currency for non-essential imports at negotiated exchange rates.

Lastly, the official requests that the government allow exporters–except for those dealing in petrochemicals–to sell their export earnings to importers at negotiated rates.

Khansari cautions that the continuity of status quo will only lead to more turmoil in the forex market in the coming days.

The government last month unified the exchange rate for the US dollar in response to the sharp plunge in Iranian rial in the recent past.

It has assured the public that the US dollar for defined purposes, including imports, travel, students and research projects, will be offered by the government at the exchange rate of 42,000 rials.

Government measures came after lawmakers pressured it over the forex volatility, saying that unless the government came up with a clear plan to stabilize the market, they would lay out their own measures.

The Council of Ministers also ruled that all exporters should return their export earnings to the country's "economic cycle" either by selling them to or depositing them in banks or reusing it for imports.