Luxury Imports Signal Wrong Currency Policy

Lawmaker Says: By Amending the Law, the Central Bank Governor Should, Like Ministers, Need a Parliamentary Vote of Confidence

According to Ambassador Arjan, the exchange rate in Iran's economy is not just a simple price; This variable is the anchor of inflation expectations and production costs. When the currency price fluctuates, first the raw materials become more expensive, then the cost of transportation, then the price of the final product, and finally, the people's table. This is the reason why in Iran's economy, the high price of the currency itself is an inflationary factor and not just a result of inflation.

In such a situation, any policy that encourages more volatility will directly affect people's livelihood. Part of this situation is due to decisions that have been taken without considering the basic priorities of the country; Decisions such as providing foreign exchange to certain groups or allocating limited resources to import unnecessary goods, which are completely wrong decisions in this situation of limited foreign exchange resources.

In such a situation, people are worried about the future of their livelihood and expect the parliament to enter the field as a supervisory body. One of the proposed solutions is that the head of the central bank, like the ministers, gets a vote of confidence from the parliament to assume this responsibility. This mechanism can strengthen parliamentary supervision and ensure the accountability of this institution to the people's representatives.

In the current situation where the country is facing limited foreign exchange resources and the pressure of sanctions, prioritization in the allocation of foreign currency is an undeniable necessity. Zero inflation for basic goods is achievable with the right policies, but this goal can only be achieved when foreign exchange resources are directed towards the real needs of the people.

In the following, you will read the details of the conversation with Mohammad Bayat, the representative of Khomein and the first secretary of the commission of internal affairs of the country and councils in the parliament. Mohammad Bayat stated at the beginning of his speech about the current state of the currency: the state of the currency is not worthy and the high prices of the currency itself are inflationary. People are worried, and the central bank faces fluctuations in currency prices with policies.

He continued: When foreign exchange resources are limited, purposeless injection of foreign currency not only does not solve the problem, but also increases speculative demand and inflames the market. In such a situation, resources should be directed towards basic needs and productive sectors.

This parliament member noted: We agree 100 percent that the parliament should be able to monitor the performance of the central bank with a mechanism. A legal solution must be found. The head of the central bank should get a vote of confidence from the parliament like the ministers. When this institution has all the powers to manage inflation and currency control in the country, it should be directly monitored by the parliament. Special measures in this field should be taken urgently so that the people can be sure that the parliament will follow their rights and prevent currency fluctuations.

Bayat said: Importing luxury goods is not the right thing. Importing expensive cars and pet food is not acceptable. Luxury cars are for rich people who get richer. Currency for the import of basic goods should be on the agenda. Zero inflation for basic goods is achievable with the right policies.