Economy, Business And Markets

Veteran Businessman Backs Forex Unification

Veteran Businessman Backs Forex UnificationVeteran Businessman Backs Forex Unification

President of Iran-Iraq Chamber of Commerce Yahya Ale Es’haq has hailed the adoption of a unified foreign exchange rate regime as ideal for the economy.

“An exchange rate of 30,000 rials for the US dollar would revitalize the business environment,” he said, as quoted by IRNA.

However, he stressed that if unification of forex rates happened overnight it would not be appealing to businesspeople.

Governor of the Central Bank of Iran has said in his latest comments that forex rates unification can happen within five to six months. Valiollah Seif, however, favors an exchange rate of 32,000 rials.

Ale Es’haq cautioned that a multiple exchange rate system would foster corruption, saying the emerging conditions of the economy are facilitating a return to a single exchange rate in a controlled and limited manner.

Ale Es’haq, who presides over Tehran Chamber of Commerce, pointed to the market exchange rate that currently hovers around 32,000 rials and the one predicated in the country’s budget (29,500), saying “it remains to be seen” which rate will finally prevail.

“However, if unification would mean a transition from the budget rate to the market rate in a premeditated move, this would have adverse effects such as commodity price hikes,” he warned. Instead, Ale Es’haq said the balanced rate of 30,000 rials would put things on an even keel.

“The higher the forex rate is, the more exporters and the government will benefit and their gain will be the importers’ loss,” he maintained. “A volatile exchange rate would neither serve the government nor the exporters or importers, leaving a balanced rate the best option for businesses and the economy.”