The central bank’s foreign currency exchange and the consequences of reducing foreign currency assets

The political government of Mohammad Reza Farzin behaves in the currency market and makes decisions to keep his word about fixing the price of each dollar at the border of 50 thousand tomans. Considering the trade deficit of the past few months, which has reached 10 billion dollars and there is a possibility of its increase, the central bank is spraying foreign exchange and this leads to a decrease in foreign currency assets.

Experts and economic activists believe that the trend of foreign exchange from the sources of income from crude oil exports to cover the trade deficit has led to the reduction of the country’s foreign currency assets and will cause us to witness the formation of queues of demand for the conversion of Riyal assets into dollars at the intersection of Istanbul in the coming months. Disturbance of the balance in such a market leads to a further decrease in the value of the national currency and a high jump of the dollar. And that is in the situation where the parity rate of the dollar with all the valid world currencies has increased in the last 3 months to such an extent that the dollar has reached its highest global price in the last quarter of a century.

The absolute value of foreign assets of the Central Bank has decreased by 43% in the last 18 months (in the last 20 years there has never been a record of a 28% decrease in the net foreign assets of the Central Bank for a period of one year) and this means a decrease in the foreign currency assets of this bank as well. LT is. If the management of the foreign currency market reaches an imbalance, it is expected that by removing the current preferential exchange rate and gradually liberalizing the price of the dollar, the country will suffer another currency shock and its corrupt consequences – including an increase in inflationary expectations. Simultaneously with the reduction of the net foreign assets of the Central Bank and the further reduction of foreign exchange resources (considering that the government has predicted the amount of oil sales for the next year in a decreasing form in the budget bill), we again witnessed an inflation caused by the jump in the price of the currency. we will be In this case, at the same time, capital outflow from the country will accelerate and we will witness the Mexican wave of demand at the intersection of Istanbul.