Monetary contracts are a solution to remove the dollar from currency exchanges
In an interview with Iran Economist, Hadi Qavami said: The currency market has two sides, one side is the currency supplier and the other side is the currency demander. When the demand increases for some reason, the exchange rate increases and the market fluctuates.
He said: One of the factors of currency market volatility is the psychological factor, for example, economic activists feel that the future of the economy is not clear and this affects the demand for currency. The percentage has decreased, but the 40% inflation rate is still not low, and despite the government’s efforts to reduce the inflation rate, we are still at a high level in terms of inflation; Government policies should be pursued to control the inflation rate.
Qavami added: In inflationary conditions, some people look for assets that maintain the value of their money, so they convert their rials into currency, and due to the currency restrictions, its price increases.
The former MP said: If stability is established in the economy, the exchange rate can be controlled to some extent, and the currency will be allocated for the import of raw materials and machinery.
Qavami stated: All institutions related to the economy must be coordinated with the government in order to succeed in controlling inflation, conditions must be provided for non-oil exports so that more foreign currency enters the country and foreign currency sources are diversified, in that case it can help to control the exchange rate. did
* Monetary agreements effective in reducing dollar demand
He asked whether regional monetary agreements are effective in reducing dollar demand. He stated: Bilateral or multilateral regional agreements will reduce the demand for currency, efforts should be made to reduce the demand for currency and minimize the psychological factor in the currency market.
Qavami said: Iran’s trade relations with neighboring countries should be made smoother and easier, and currency exchanges with neighbors should be done with national currencies.
* The import of consumer goods should decrease with the growth of domestic production
The former MP said: Part of the demand in the currency market is non-essential demand that can be controlled. Assuming that for imported consumer goods, 4 billion dollars of foreign exchange resources are spent on imports, so we must import goods that are used in the production line, we can produce some goods inside the country and save currency.
Qavami stated: Every year, between 60 and 70 billion dollars of consumer goods are imported into the country, if we can reduce at least 5 to 10 billion dollars from the import of consumer goods, and replace them with domestically produced goods, we can control part of the foreign exchange demand. do.
The former member of the parliament said that 70% of imports are related to production inputs, saying: As the demand for goods decreases, it will reduce the demand for currency.
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