08:20 GMT +309 December 2019
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    Iranian street money changer holds Iranian banknotes (File)

    Iran Green-Lights Unlimited Influx of Money into Country

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    Iran has lifted all constraints on foreign currency imports. The Director General of the Import & Special and Free Zones Department of the Iranian Customs Administration Ali Magooli has announced this decision.

    According to him, each legal and naturalised person following Iran Central Bank's rules can bring any amount of money into the country, and no security, law enforcement, or customs department is allowed to interfere. Hoshyar Rostami, director of the Department of Finance from the Iranian office of Finapath (Canadian Institute for economic research) has told Sputnik about the consequences of this decision on the Iranian economy.

    READ MORE: Iran Banks on Thriving Gold Mines Amid US Sanctions

    According to Rostami, such a law should be adopted "with time limitations, since it contradicts FATF demands for Iran, allows for money-laundering and may negatively affect the financial system of the country".

    "It creates an imbalance (with the FATF requirements), however, it should be taken into account that Iran is now in a special situation. There are two points here to be noted. If this order means that everyone will be able to bring in dollars and other currencies without declaring it. It will negatively affect Iran's economy and its banking system", Rostami noted.

    While answering a question about whether this order will increase the living standards of Iranians back to the level of 6 months ago, the expert noted:

    "People won't go back to what was 6 months ago. The country won't as well. A dollar increase has happened. It was logically grounded and had certain causes. A decrease in dollar rate is caused by several reasons. Firstly, the demand for the dollar has fallen due to the unstable rate of this currency. People don't seek to buy it. The demand has fallen. The central bank has set limits on money remittances in Iran, which is why it is impossible to transfer large sums of money in the country".

    According to him, brokers have also faced these problems and cannot promptly conduct sales and purchases of the currency.

    "We should also take into account that the largest supplier of money that can influence its price, adding an extra amount, or extracting part of it, is the state. However, inflation exists with its own rules. Inflation is demand and supply for a diversified set of goods that can't be influenced by the state", the expert added.

    Inflation is a kind of thermometer, showing the state of economic development of the nation that works in any country he said. "You can't play with it" the expert concluded.

    Views and opinions, expressed in the article are those of Hoshyar Rostami and do not necessarily reflect those of Sputnik.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.

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    Tags:
    banks, money, Financial Action Task Force (FATF), United States, Iran
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