Economy, Business And Markets

USD Refuses Backseat

USD Refuses BackseatUSD Refuses Backseat

Foreign exchange rates might drop in the short-run due to the psychological situation after the lifting of sanctions according to Mohammad Mehdi Raiszade, a banking advisor to the Iran Chamber of Commerce.  The analyst added that the forex market will go through relatively stable phases in the long-term but dismissed the possibility of the greenback retreating to somewhere around 32,000-33,000 rials.

The member of the Money and Credit Council referred to the recent volatility in the forex market and held security issues in the region responsible for the US dollar’s surge.  Recently, the US currency passed the psychological level of 36,000 widening the gap between the official rate of 30,000 and its rate in the parallel market.

  Raiszade added that the Central Bank of Iran will be better placed to unify  forex rates when the sanctions fade.

“With the situation becoming normal for our banking sector and reconnection to SWIFT, we can eventually unify the exchange rates,” ISNA quoted him as saying.

Declining Oil Prices

He pointed to the sharp decline in international oil prices saying that a price recovery for the black stuff in the foreseeable future is pretty far-fetched. He proposed focusing on tax revenues as a substitute for the unprecedented decline in oil revenues. Raiszade, however, stressed the importance of “equally distributing the tax plan” warning that putting the entire tax burden on the manufactures will invite more insolvency.

Global crude prices are at 11-year lows due to oversupply mainly by the OPEC members. On Sunday Brent Crude Oil – the main international index --was traded at $ 36.88 while the WTI Crude Oil sold for $34.73 a barrel.