The Central Bank of Iran says since mid-April it has allocated $3.34 billion for importing medicine.
According to a press statement seen on the bank's website, the forex was paid as a part of an agreement between the Ministry of Health and the CBI, which required the latter to earmark $1.3 billion by July 21 for medical imports.
The CBI said it also gave $2.04 billion resources through the Nima platform to meet emergency medicine and related equipment needs.
The central bank noted that it has prioritized currency needs of the key pharmaceutical sector. "Such orders are evaluated and approved within 24 hours," the press release said.
It earlier called on the Health Ministry and the Plan and Budget Organization to take appropriate measures to address the demand for vital drugs, after the termination of the above-mentioned agreement.
It recent months sections of the local media reported on the critical shortages of some medicine after the government ended its forex subsidy policy that directly affected drug manufactures.
Iran has a large drug manufacturing industry that supplies most the pharmaceutical needs but is often dependent on imported raw material.
Limited currency subsidies started after the steep rise in forex rates in the spring of 2018 when the previous administration pegged the US dollar at 42,000 rials and cut the list of eligible goods to a bare minimum, including food, medicine and some raw material.
In the fiscal 2021-22 budget the controversial subsidy policy was to last no further than Sept. 21, though the cabinet decided to sustain the policy.
President Raisi instructed the CBI to provide the Health Ministry currency for importing medicine and curb the steep increase in prices.
That subsidy rate was almost a seventh of its value in the open market. Fraud and misappropriation of funds during the years were rampant as some big importers, cronies, shell companies in cahoots with vested interests took billions in cheap currency but their imports were minimal and at times zero.
Subsidized currency is sourced largely from oil export for importing essential goods, pharmaceuticals and machinery. The subsidy policy was designed to avoid price hikes in food and raw materials and protect consumers against inflation and price gouging almost always blamed on high forex rates.
The Raisi administration, however, put a permanent end to the years-long debate on whether or not to end the increasingly costly and corruption-tainted subsidy policy.
The government's move is seen by market observers as the main source of rising medicinal bills.
