Caspian Energy Journal Caspian European Club
Tuesday, 08 January 2019 15:00

Tehran likely to devalue currency in 2019

Tehran likely to devalue currency in 2019

The Iranian authorities are likely to devalue the official exchange rate of its battered currency and may narrow the definition of "basic goods" that qualify for imports at the current rate in 2019, Caspian Energy News ( reports with reference to The National.

The re-imposition and further tightening of US sanctions since November last year will drastically reduce oil export earnings and restrict cross-border financial transactions, sharply reducing the foreign currency inflows into Iran, Fitch Solutions, a unit of Fitch Ratings, said on Thursday.

As the pressure mounts, it will limit Tehran’s ability to import basic goods, Fitch said.

Iran's rial hit record lows last year against the US dollar. Demand for the dollar is stoked by concerns that the impact of US sanctions would be felt beyond the country’s crude shipments and will affect Iran’s broader export sector.

Tehran has tried to unify the multiple exchange rate system, which in addition to the official and free market rates also includes a secondary market rate for transactions between licensed exporters and importers. However, with the gap between the official and free-market rates now at 62 per cent, unification appears unfeasible.

More details:

Person in charge of the newsline: Olga Nagiyeva

Read 682 times