The Central Bank of Iran

Iran Allocates 13.6 Billion Euros For Import Of Essential Goods

Thursday, 02/22/2024

Iran's Expediency Discernment Council has approved the allocation of 13.6 billion euros for the import of essential, agricultural, pharmaceutical, and raw materials.

As announced by the Council’s Supreme Supervisory Board on Wednesday, the authorization allows the government and the Central Bank to utilize the allocated funds "solely for the import of essential agricultural goods, pharmaceuticals, and their raw materials, as well as medical consumables."

Amidst the drastic devaluation of the Iranian currency in recent years, the government has resorted to providing foreign currency at cheaper exchange rates to importers of a pre-approved list of essential goods, including medicine, food, and crucial raw materials. Importers are mandated to procure and transport the approved goods into the country.

The official exchange rate of the Iranian rial, subsidized by the state, stands at 285,000 rials per US dollar, significantly lower than the open market rate of about 570,000 rials per dollar. The official rate is exclusively utilized for importing essential goods, aiming to shield Iranian consumers from sudden and dramatic price increases due to sanctions.

However, concerns have been raised regarding the misuse of allocated foreign currency, with reports indicating that some individuals and companies fail to import the agreed-upon goods or sell them at inflated prices after importation.

In a recent example, Debsh company, responsible for a significant portion of the country's tea imports, reportedly received an astounding $3.37 billion in foreign currency from the government at a preferential exchange rate for tea and machinery imports between 2019 and 2022. However, reports suggest that the company has sold $1.4 billion of the currency on the free market at higher rates.

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