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Gov’t Think Tank: Overvalued Currency Counterproductive

Rial slid to an all-time low against the American currency in the early days of the current year.Rial slid to an all-time low against the American currency in the early days of the current year.

Institute for Trade Studies and Research, the think tank of the Ministry of Industries, Mining and Trade, concluded in a recent report that longstanding policies practiced by consecutive governments aimed at helping lower-class groups are having the opposite effect. 
Among those policies, ITSR mentions the government policy to keep the rial overvalued in the name of strengthening the national currency and subsidizing energy and fuel prices despite rising inflation. 
The report, published on the think tank’s website, traces these counterproductive policies to political motives that avoid making tough reforms, adding that they are particularly detrimental to an economy vulnerable to domestic and external shocks. 
“Iran’s economy, every now and then, faces volatility in the foreign exchange rate, energy prices, goods prices, fixed-income investments and GDP growth,” it said. 
 

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