2024-04-10T10:07:41+00:00
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/ A member of the Industry and Trade Committee in the Iranian Parliament, Muhammad Hossein Farhangi, confirmed that Israel is the main reason for the rise of the dollar against the Iranian currency, as the MP described in press statements the Israeli attack on the Iranian consulate building in Damascus and the escalation of tension in the Middle East, as “ “One of the most important factors of the recent wave of the dollar’s rise in the Iranian market.”
Farhangi explained, “Despite the prominent role of this issue, the economic management crisis is the most important factor in the turmoil in the currency market, and the government must change its economic team.”
Last week, the price of the dollar crossed the barrier of 650,000 Iranian riyals against one US dollar after several jumps in foreign currencies.
It will not remain stable
For his part, economic expert Hajjat Elah Farzani considered that the current rise in the exchange rate was affected by the Israeli attack on the building next to the Iranian consulate, and added that the rise in the exchange rate will not remain stable.
He told Erem News, “Another issue that could be an important factor in the turmoil in the exchange market is the central bank’s mismanagement regarding the unjustified increase in the exchange rate, which was affected by recent foreign policy issues.”
Ferzani explained, “Given that the leaders of the Islamic Republic of Iran do not act enthusiastically in many decisions, especially political issues, it seems that we will witness an expected increase in the exchange rate and gold.”
He added, “Given that the rise in the exchange rate is a psychological and emotional matter and not the result of fundamental economic changes, the central bank should not get involved in this issue quickly. Rather, it should be more patient, and then control the currency market to return to previous rates, and prevent fluctuations that may occur.” It exacerbates inflationary expectations.
Continued rise
In turn, Member of Parliament Azami Sardoye expected that the price of the dollar would rise and reach 800,000 or one million riyals by the end of this year, considering that “the recent meetings between the government and parliament had no results,” noting that “dismissing the Minister of Economy and Financial Affairs, Ihsan Khandouzi, will not solve the problems.” “The people.”
Speaking to Erem News, he believes that the rise in the price of foreign currencies will stop after a short period if it is not due to economic problems.
Sardoyi stated, “Political shocks have short-term effects on financial markets and the economy, so the attack on the Iranian consulate in Damascus will heat up the currency market for a few days, and will also lead to negative news on the political scene.”
He added, “Political tensions, such as the Al-Aqsa flood, and events in the region did not allow the exchange rate to rise steadily and significantly last year, and therefore the effects of the Damascus incident will continue for a maximum of one to two weeks, after which the currency market will return to its previous trend.”
Sardoye noted that “if the rise in the price of the dollar in the currency market is caused by economic motives, it has long-term effects. However, if the price of the dollar does not rise in the currency market, it is looking for economic impulses, and therefore the attack on the Iranian consulate is considered a political event, and if “It is accompanied by a change in economic variables, which will have short-term effects.”
He stressed that “fortunately, exports, including oil, which generates foreign currencies for the country have increased, but more attention should be paid to non-oil exports,” noting that “the central bank controls monetary variables such as the rate of growth of liquidity, the monetary base, and inflation, but it is “It is better for this institution to be more careful when borrowing from banks.”
Failure to control
In another context, economic expert Muhammad Ghafouri said that the price of the dollar rose from about 500,000 riyals last month to more than 600,000 riyals this month, due to the Central Bank’s failed policies in controlling the currency market.
He told “Erm News” that the 60% difference between the price of the dollar in the government rate and the open market caused this problem and the joke, which he described as “false.”
Ghafouri added, “The central bank was unable to control inflation with monetary tools and increase interest rates. Because of that, stagflation occurred and the price of foreign currencies also rose, and the central bank’s policy has not succeeded in controlling the exchange rate so far.”
He pointed out that “the free market is witnessing false demand and the reason is the deep price gap between the price of the government dollar and the free market, and the greater this gap, the more it harms the country’s production and economy.”
In recent days, calls have escalated for the dismissal or interrogation of the Central Bank Governor, Mohammad Reza Ferzin, and the Minister of Economy, Ihsan Khandoy, while Ferzin said in an interview last night that “soon the Central Bank will put an end to the decline in the price of the national currency.”