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Strange Fallacy in Iran’s Economy

Strange Fallacy in Iran’s Economy
Strange Fallacy in Iran’s Economy

A strange fallacy in Iran’s economy claims that as foreign exchange rates increase, the country’s exports will follow suit. 
This is a fundamentally wrong statement, because first of all exporters need stability and improvement of relations with the world. If the exports of a country were supposed to improve significantly through the rise in the exchange rate, Iran should have jumped ahead of China to the top of the list of world exporters, thanks to the continuous depreciation of its currency in recent decades. But we all know this is not a case. Hamid Hosseini, an economic analyst, evaluates this assumption in a write-up for the Persian daily Ta’adol. A translation of text follows: 
Although the devaluation of local currency is one of the tools used by some countries to boost exports, this process requires a condition without which the promotion of export cannot be realized. For example, China, with all its domination over exports, has increased the value of its currency against the dollar from around 6% to 7.2% in the past one year. That is, each US dollar is sold at 7.2% of the yuan. 

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