The Central Bank of Iran allocated $11 billion for importing goods in one month since the beginning of the current fiscal year (March 21), a CBI official said.
“Four billion dollars was for importing basic goods and medicine”, Mostafa Qamari-Vafa, head of the CBI public relations department, wrote on his social medial account on Friday.
The CBI gave $7 billion for the import of other goods. It was not clear what the other goods would be.
Qamari-Vafa said the amount is five times the $2.3 billion earmarked in the corresponding period last year.
Last week, the CBI said it had allocated $1 billion for importing medicine in the month, more than double the $450 million in the two preceding months and almost a third of the total forex given pharmaceutical and medical equipment import in the whole of last fiscal year.
Currency for importing basic goods and medicine is highly subsidized despite mounting calls from independent economists and experts for removing the currency subsidy policy.
It appears that both the government and Majlis cannot agree on how to approach the highly controversial and costly subsidy policy, apparently concerned about its inflationary consequences and detrimental impact on the livelihoods of large sections of population, especially fixed-wage earners and the unprivileged.
The subsidy ($1=42,000 rials) given by the government under former president Hassan Rouhani has come under mounting criticism by some economists and the Raisi administration.
A similar, if not same, subsidy policy has been in place for decades.
On Tuesday, the Economy Minister Ehsan Khandouzi said the government is determined to take steps towards gradually eliminating the forex subsidy this year.
Forex subsidy is sourced from oil export revenue that has plunged to unprecedented levels (though the situation has improved since January as oil imports have increased) due to the US sanctions and is used only for importing food, essential goods, pharmaceuticals and machinery.
Experts and policymakers who oppose the end of subsidized imports argue that the inflation rate, now officially hovering around 45% and prices of medicine going through the roof, the move would deal another big shock to the poor, fixed-wage earners and those at the end of the economic ladder.
The Majlis recently allowed the government full authority over reversing the subsidy policy but has obliged it to return the subsidies to the public using “alternative schemes”.
