Tishwash: Because of Iraq!.. Iran will accept “what it did not accept before”
Strategic and security affairs researcher, Firas Elias, said on Thursday that Iran will accept “what it did not accept before” in order to preserve Iraq because it is the gateway to its safety and the gateway to the danger that could reach it in the future.
Elias said in a post on the “X” platform, which was followed by “Al-Jarida”, that “Iraq is the jewel in Iran’s crown in the region, and it is the wall that protects it from a major collapse, so it will secure and preserve it, even if it is forced to accept what it did not accept before.”
He explained, “Today, it (Iran) is open to all the regional and international solutions and conditions proposed in Iraq, because it is the gateway to its safety and the gateway to the danger that could reach it in the future.”
Tishwash: What are the objectives of expanding foreign transfer channels by the Central Bank of Iraq?
Economic expert Alaa Al-Fahd revealed, today, Thursday (December 19, 2024), the goal of the Central Bank of Iraq in expanding external transfer channels for local banks.
Al-Fahd said in an interview with Baghdad Today, “Within the Central Bank’s policy and its continuous attempts to control foreign transfers to finance trade, especially in dollars, there is a continuous effort to expand the basket of foreign currencies used in imports, especially with countries with which we have import dealings, the transfer is in the currencies of the countries, and there was an agreement on this with the Turkish side, as well as the Emirates, China, and today with Jordan and Saudi Arabia.”
He explained that “this step reduces the demand for the dollar to finance foreign trade, as most of the demand for the dollar is to finance foreign trade, and with the expansion of the currency basket, the pressure in the parallel (black) market on the dollar decreases, and this reduces the exchange rate in the local market.”
He added, “This step will also allow many banks to deal with many countries according to the currencies of those countries, and this will enhance a major role in developing the work of banks in terms of experience. Its main goal is to control the dollar exchange rate and work to reduce it.” link
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Tishwash: Amidst the challenges… What is Iran’s plan to save its currency?
The imminent return of US President-elect Donald Trump to the White House and rising tensions with Israel have put pressure on the Iranian currency, the rial, to lose another chunk of its value and hit a new record low.
The European Union has added further pressure on the Iranian rial, after announcing its intention to activate the “trigger” mechanism, following Tehran’s condemnation by the International Atomic Energy Agency’s Board of Governors last month for “not cooperating sufficiently” in its nuclear program.
After the Iranian press used to publish daily reports about the decline in the value of the currency against the dollar, the Iranian government’s economic team announced its plan to limit the decline of the rial and curb the prices of hard currency in the markets.
Supply and demand
In a move aimed at bridging the gap between the government exchange rates and the parallel market, the Central Bank of Iran has cancelled the government pricing of hard currency allocated for importing some basic commodities, starting last Saturday, so that the price of the green currency will be determined according to the mechanism of supply and demand between exporters and suppliers in the consensus market designated for trading hard currencies.
Following this move, the consensus price of the dollar stabilized the next day at around 600,000 Iranian rials, but it continued to rise on Monday and Tuesday in the “NIMA” market for foreign exchange trade at 613,000 and 617,000 rials, respectively.
In the parallel free market, the price of one dollar jumped to 768 thousand riyals last Monday, then touched the threshold of 778 thousand riyals yesterday, Tuesday, after trading at about 733 thousand riyals, on the eve of the launch of the new mechanism.
Objectives and justifications
The Central Bank of Iran’s move came after a number of factories refused to continue their activities due to the accumulation of losses resulting from the mandatory pricing, as they were forced to display their export revenues in the government market, and sell their hard currency at prices lower than their real price, and in return buy raw materials according to the parallel market prices.
Iranian Economy Minister Abdolnaser Hemmati said that implementing this mechanism is a preliminary step towards getting rid of the mandatory pricing, especially in the hard currency market, adding that the mandatory pricing will lead to financial corruption, rent distributions and exacerbate difficulties in the hard currency market.
In a tweet on the X platform, Hemmati wrote that unrealistic prices cannot be defended without containing inflation, and despite the feasibility in the short term, it will not last long, warning that continuing to work with mandatory pricing would eliminate the national reserves of hard currency and undermine the country’s economic security.
A strong shield to protect the economy
A segment of Iranian experts believe that the Central Bank aims, through its measures, to encourage factories to produce and export.
Economic writer Hamid Sayed Qurbani welcomed the new mechanism, considering it to be in the interest of economic development through supporting exports, and also in line with the restrictions that should be imposed on imports in order to achieve comprehensive self-sufficiency and presence in foreign markets.
In an article titled “The harmonious currency; a first step towards national development” published on the (Economy Online) website, Sayed Qurbani believed that the new mechanism will reduce the volume of unnecessary demand for imports, and contribute to eliminating the false demand for hard currency, leading to a reduction in its prices in the markets, transferring profits from the suppliers’ basket to exporters, and supporting national production.
Given the national fear of shrinking oil exports with Trump’s return to the White House by imposing more sanctions, which could lead to an increase in the currency’s price in the markets, the author likens the new mechanism to a strong shield that will protect the national economy from external shocks to the exchange rate.
Political developments
In contrast, Iranian economic expert Albert Baghzian recalls the obsession of successive Iranian governments with unifying the exchange rate and bridging the gap between official prices and the free market, stressing that the harmonious price mechanism will succeed if it satisfies suppliers and exporters and spares them the need to consult the black market for supply and demand, adding that he does not expect the new mechanism to succeed.
In an interview with Setareh Sobh newspaper, Baghazian considered lifting foreign sanctions a condition for the Iranian economy to get rid of the crises of high hard currency prices and the decline in the value of the national currency, explaining that the exchange rate in Iran is affected by political developments more than economic indicators and supply and demand in the markets.
He said: “Given the reality of sanctions, tension in Syria, and Trump’s return to power in the United States, concern will remain in the Iranian hard currency market, because providing hard currency in sufficient quantities is a condition for talking about unifying the exchange rate, which encourages the strengthening of the national currency and the decline in the value of foreign currencies.
The Iranian academic said that his country suffers from a problem in providing hard currency due to the sanctions, even the revenues from oil sales return to the country in the form of goods, stressing that imposing sanctions on the economy is equivalent to cutting off a person’s limbs and paralyzing his life, as the major powers have been imposing embargoes instead of wars and military attacks.
The fall of the lion
On the other hand, a third segment in Tehran senses a direct relationship between the fall of Bashar al-Assad’s regime in Syria and the acceleration of the decline of the Iranian currency and its recording of a new record low against the dollar, due to the major repercussions of the regional political development on the Iranian economy.
Although the value of trade exchange between Iran and Syria did not exceed $170 million during the past year, the fall of Assad paints a foggy horizon for Tehran’s dues to Damascus, which are estimated at tens of billions of dollars.
In this context, the analytical website (Bazaar News) published an article entitled “The Syrian Crisis and Its Impact on the Iranian Economy,” in which its author believes that the new scene in the Levant will expose part of Iranian investments in the Syrian infrastructure and its military and security sectors to destruction.
The article believes that the lack of security in Syria may affect Tehran’s investments in neighboring countries, as well as undermine the Iranian corridor linking the East and the West and reduce its position in front of the corridor planned to link India and Europe via the Middle East (IMEC).
Mot: . ooooh lordy – been un of does Years!!!!
Mot: ……….. UH OH!!!!!
