Economy, Business And Markets

Conditions Suitable for Single Forex Rate

Conditions Suitable for Single Forex RateConditions Suitable for Single Forex Rate

The move to unify foreign exchange rates is now plausible if certain conditions are met, Head of Tehran’s Chamber of Commerce said.

In support of the government’s designated six-month time frame for exchange rate unification, Masoud Khansari said “Since the single exchange rate has nothing to do with the government’s forex reserves, the single rate regime can trigger an economic boom, provided that markets determine the rates,” Fars news agency reported.

“Despite the 6,500 rial ($0.2153) difference between the official exchange rate and parallel (free market) rate,” Khansari said,” the release of frozen Iranian assets oversees, expected foreign investments in Iran and the predicted economic growth rates...due to the lifting of sanctions make the prospect of a single rate all the more feasible.”  

Iran has been using a dual exchange rate system since 2012 when international economic and banking restrictions on the country were tightened due to the dispute over the nuclear program.

Airplane Finance

Regarding the issue of paying an estimated $25 billion for purchasing planes from France’s Airbus despite the country’s economic constraints, Khansari said the import bills will be paid from the airlines’ income.

President Hassan during a visit to France last month oversaw the signing of agreements between Iran’s national flag carrier (Iran Air) and Airbus to buy 118 aircraft.

Some political factions inside the country have criticized the deals as “unwanted” and “costly” at a time when other key economic sectors are in dire straits and in need of help and infrastructure investment.

“During the sanctions years, Iran paid almost $5 billion annually in airfare to foreign airlines, a cost that can be done away with,” Khansari said.