During the recent days, Iranian Rial has lost its value against foreign currencies in a new wave of exchange rate volatilities. However Iranian government tried hard to control the market but it seems it has failed to do that, according to Ahmad Alavi, an economist and university professor based in Sweden.
“Iranian government cannot manage the foreign exchange markets in short term appropriately. The current exchange volatility against foreign currencies is because of the long term reasons and factors which the government couldn’t stop them. The government has tried hard to repress the exchange markets and postpone the current conditions.” Ahmad Alavi said in a question regarding Iran’s economy.
“That means the government has failed to handle the markets. In order to stabilize the exchange markets in the country, government must first solve the issue of high inflation rate. This rate is increasing on daily basis in Iran so it’s no surprise to see the current volatilities in exchange markets.” Ahmad Alavi continued.
“Fundamental problems should be high priority for the Iranian government. Inflation rate is a direct result of economic conditions in Iran and its affairs with foreign countries. Iran’s nuclear case acts major role in this plan.” Alavi concluded.
Iran is under the fire of Western economic sanctions set by the United States and European Union. The production and sale of oil, which is the most strategic commodity of the Iranian nation, have been decreased significantly during the recent months.