Variables affecting the foreign exchange market in the critical months ahead

According to the IBNA correspondent, many internal and external developments are taking place. Abroad, the corona vaccine has reached the stage of global distribution, at least among the volunteer countries, the US presidency has once again fallen into the hands of the Democratic Party, and the P5 + 1 countries have called for the resumption of negotiations with Iran. At home, on the other hand, Iran is on the verge of 1400 presidential elections, financial markets are under control and currencies and coins have been moving in a slow channel for a long time. are. This removes many obstacles to the country’s currency transfer, but in practice carries obligations for Iran. Now the question is where will the currency developments go in the coming year and what do the experts say about it?

Alireza Soltani, an expert in political economy, told IBNA: “It seems that the foreign exchange market and, consequently, the entire Iranian economy is in a very sensitive and decisive situation.” Naturally, in these circumstances, the role of the central bank is very important and effective in order to be able to manage the foreign exchange market in a way that creates the least tension and challenge for the country’s economy at the macro and micro level of the economy.

He added: “The most important task of the central bank in this situation is to prevent severe, emotional and shocking fluctuations in the foreign exchange market so that this market, which is on the decline, is managed with the lowest economic cost for households as well as economic and production units.”

Soltani noted: “It is predicted that in the coming months, the minimum exchange rate will not increase from the current level, and it is expected that the foreign exchange market will decline further.”

“One of the predictable variables is the release of the country’s foreign exchange resources in the near future,” he said. “Over the past three years, due to economic sanctions, the country’s foreign exchange resources have been blocked in many countries and the possibility of using It does not exist that this figure is estimated at about 20 to 25 billion dollars. These resources are likely to be released in the coming months as the United States returns to the Security Council and sanctions are lifted. However, this release may happen sooner, because the negotiations for the release of these resources have started with the final departure of Trump.

He continued: “The next variable that can affect the foreign exchange market is the lifting of the embargo on oil sales in the coming months, which in itself will pave the way for the return of new foreign exchange resources to the country.”

Soltani emphasized: The reality is that these two variables can naturally have both psychological and real effects on domestic markets. In this way, its psychological effect can show itself sooner and provide the ground for even more reduction, and its real effect will naturally be very tangible, and with the real release of foreign exchange resources as well as the sale of oil, we can see these changes.

Regarding the central bank’s mission during this period, he said: “The central bank should play a more active and effective role in leading political and economic developments and, together with the Ministry of Foreign Affairs and the Ministry of Petroleum, help advance the lifting of sanctions, because the coming months Iran’s economy is important and decisive.

FATF link perspective

Soltani reminded that in order for the central bank to be successful in its main mission to prevent currency market fluctuations and sudden and shocking growth, it must have a precise forecast of future political developments and plan for these developments.

He added: “It is necessary for the Central Bank to provide an accurate and clear picture of the country’s economic situation to decision-making institutions in the field of economy and foreign policy, both the Islamic Consultative Assembly and the government, to create a consensus in the country.” Manage foreign and economic decisions in the country.

“Another point is the resumption of the review process and, most likely, the approval of the FATF in the Expediency Council, which can somehow prevent fluctuations in the foreign exchange market, which, of course, the central bank must plan in this regard,” he said. Have; This readiness must be present in the process of reviewing and approving bills related to the FATF or after it is likely to be approved.

Manage the transfer of home currencies to the market

Soltani pointed to the importance of paying attention to the management of the transfer of domestic currencies to the market and said: In the coming months, under the influence of political developments such as the US return to Borjam and the lifting of sanctions, the release of Iranian foreign currencies, the entry of domestic currencies into the market will increase. The central bank must design a clear and comprehensive plan to prevent the negative impact of this possible volume of foreign exchange on the country’s economy, as well as planning for enterprises and economic and commercial companies.

Manage emotional imports after Borjam

For next year, Soltani stressed the importance of planning for the country’s foreign trade, especially the import of goods into the country, and said: “So far, we have faced many problems and obstacles due to sanctions, which is the economic power of families, especially in relation to goods.” Consumption is affected. Therefore, any opening in the import of goods must be accompanied by the opinion and expert management of the Central Bank.

He added: “On the other hand, the central bank should manage the allocation of currency for the import of goods, especially consumer goods, in the coming months so that the import route does not enter the emotional market and with good economic logic and management, this process should be managed to witness the exit.” Let’s not be emotionally and uncontrollably under the pretext of opening up the country’s economy and families.

The political economy expert stated: “There is a set of developments that force the central bank to take more steps towards economic opening in the country and to predict different scenarios that are commensurate with the developments, and to have the necessary tools to Do not be unplanned in the face of various developments.

In the end, he said: “Whether the shocking increase of the currency or its shocking decrease, both have serious losses for our country’s economy, and the Central Bank must consider and follow a detailed plan for these two situations as in the past.”