MOSCOW, March 4 – RIA Novosti, Natalia Dembinskaya. Tehran borrowed almost entirely from Moscow the recently adopted package of measures to strengthen its national currency. Experts are sure that the Russian recipe will help the Islamic Republic, whose economy is much more dependent on the export of natural resources.
The Iranian rial has almost halved in six months. This is a result of the riots stemming from the domestic political crisis and new international sanctions.
The West accuses Tehran of violating human rights and supplying Russia with dual-use goods, including drones (Russia and Iran have repeatedly denied this). The country’s nuclear program has been targeted again.
At the end of February, the rial fell again, and the official exchange rate against the dollar is several times lower than the unofficial one. The rial is not freely convertible. Against the backdrop of record inflation, the black money market is developing.
“Long-term US and EU sanctions have an impact. The informational and psychological pressure on market participants from the West also has a significant impact,” says Andrey Loboda, BitRiver’s economist and communications director.
Now they give over 600 thousand riyals for the dollar (380 thousand in mid-December).
Trying to reverse the situation, the Central Bank of Iran adopted a package of measures to strengthen the national currency. Based on Russia’s experience in stabilizing the ruble.
Didn’t wait: Russia repelled an unprecedented blow
All foreign exchange earnings and reserves from export transactions are now adjusted according to the Central Bank’s key rate.
The same thing happened in Russia a year ago. The actions of the Central Bank and the Ministry of Finance stopped the sharp fall of the ruble, the rise in inflation and the risks to the banking system.
“The flexible use of the key rate reversed the sharp increase. This prevented many negative consequences. Then the rate was gradually reduced as funds came in from commodity exports,” explains TeleTrade analyst Vladimir Kovalev.
Regulating the financial sector has also helped. Large exporters of natural resources and the mining industry (petrochemical enterprises, metalworking, steel and copper producers) had to sell their foreign currency earnings.
As a result, the ruble strengthened to a record high.
Iran warns US of consequences of limiting price of Russian oil
According to experts, the Russian model will also work in Iranian realities.
“There is a clear similarity in the economic situation. It is both a specialization – the export of energy resources, and sanctions, external pressure, restrictions on exports and imports of goods and international payments,” Kovalev points out.
The analyst believes that if monetary and financial sector regulatory measures help Russia, it makes sense for Iranians to adopt them.
not the same
Another thing is that economic indicators are not comparable. Thus, inflation in Iran is 46.3%, the annual decrease in GDP is 5.7%, the Central Bank rate is 18%, the country is more dependent on the global situation.
“Sanctions from the US and EU, the oil embargo contributed to the withdrawal of capital investments, higher inflation, budget cuts that resulted in devaluation, reduced incomes of the population and increased unemployment. “Many imports are not available to Iranians,” says Sergey Chevrychkin, a financial analyst in the Finmir market.
Russia and Iran agreed to convert their settlements into national currencies whenever possible.
Payments in national currencies
Stabilization of the rial is also beneficial for Moscow: it will accelerate the removal of the dollar from the calculations, increase the share of national currencies. In fact, almost 60% of transactions between Russia and Iran are in rubles and riyals.
“With a stable exchange rate and clear currency bands, businesses are more willing to invest and make good money. It is necessary to significantly reduce the volatility of the national currencies of Russia and Iran relative to the world reserve currencies,” Loboda emphasizes.
In July last year, trading of rial/ruble pairs started on the Tehran stock exchange and strategic agreements were signed between central banks.
This made it possible not only to increase the turnover of mutual trade in national currencies, but also to share the Russian experience in stabilizing the financial system in a stressful situation.
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