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Iran Parliament’s Think Tank: Forex Subsidy Policy Impractical

If the government is adamant on implementing preferential forex allocation policy no matter the cost, it should at the least revisit the volume of allocated forex and limit it to critical imports
MRC: Forex Subsidy Policy Impractical
MRC: Forex Subsidy Policy Impractical

The Majlis Research Center, Iran parliament’s research arm, has taken a dim view of the preferential forex rate policy of the government in the past months and warned about the perpetuation of failed tried and tested policies in the coming year as seen in the proposed 2019-20 budget bill.  
It refers to the allocation of $14 billion from oil export revenue mentioned in the proposed budget to import essential goods at the heavily subsidized rate of 42,000 rials to the USD. Following volatility in the forex market that sent the rial to unprecedented lows, the government decided to unify the US dollar rate in April. This created a wider gap between rates in the open market and the prescribed rates mandated by the Central Bank of Iran. 
The USD is currently sold at around 110,000 rials in the open market, having soared to 190,000 rials at the end of summer. 

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