• Home
• News Article

Nov 01 2010

more articles from

Ahmadinejad directs central bank to lower forex rate

He made the remark in an interview on state television late on Saturday. He argued that the huge foreign exchange reserves should boost the national currency and the decline in the forex should continue.

The greenback rates rose sharply in late September and surged to around 12,500 rials, but the central bank's intervention measures reduced the market price to some 10,500 rials.

Ahmadinejad announced Saturday that Iran has over 100 billion dollars in foreign currency reserves.

"The country's foreign currency reserves have been estimated at 100 billion dollars, but it is definitely more than this figure," Ahmadinejad told participants at a national conference on development of the banking system in Tehran.

The president also said that financial resources should be allocated to various economic sectors at the appropriate time and in proportion to their priority.

He went on to say that the people's concerns about housing will be resolved in the next two years through efforts by banks.

Central Bank of Iran Governor Mahmoud Bahmani told the conference that Iran has converted 15 percent of its foreign exchange reserves into gold stocks, and thus there is no need to import gold for the next ten years.

He also said that the country's foreign currency reserve has gained several billion dollars in value as a result of the rise in global gold prices.

Exporters prefer a rising dollar

Meanwhile, the head of the Trade Promotion Organization of Iran (TPOI) stated that exporters prefer higher exchange rates for the dollar in order to increase earnings from exports.

The Mehr News Agency quoted the TPOI Babak Afqahi as saying that the government has adopted policies to support domestic exporters.

Subsidy reform plan to bring 'economic revolution'

In his interview with the IRIB Ahmadinejad, whose government has started implementing a plan to slash subsidies on food and utilities, called on Iranians to brace themselves for an "economic revolution" and urged them to co-operate by reducing their energy consumption.

The main aim of the program "is for consumption to be optimized and for the country's riches to be correctly used," Ahmadinejad said.

"When subsidies are given to the population as a whole, the wealth is being wasted," Bloomberg quoted the president. Under the new program the money will be "targeted" to benefit the needy citizens, he said.

Iran's subsidies system, which artificially keeps the price of goods such as gasoline and flour below its real value, is being revised at a time when pressure mounts on the country from a fourth round of United Nations sanctions over the country's nuclear program.

The Islamic Republic aims to save $20 billion in the first 12 months of the five-year subsidy-reduction program which is due to begin this year. It will use 80 percent of that money for cash grants to the lower and middle class sectors and for targeted support to the energy-intensive industries.

Earlier this month, the government started crediting the accounts of the poorest Iranian households in several provinces to provide a cushion once prices caps are removed. The government plans to distribute the grants every two months, Ahmadinejad said