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Replacement of Dollar with Euro
in Oil Stabilization Fund |
The
global economy is witnessing international convergence in line with
policies of the World Trade Organization for liberalization of economy and
trade.
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Replacement of the US dollar with
euro is beneficial due to the type of trade and industrial exchanges in Iran.
This is what experts think about a recent measure taken by the government to
replace euro for dollar in the Oil Stabilization Fund.
The measure has been taken after
Iran announced that it would not sell its oil in US dollar anymore, and will
only accept euro. Before that, the country’s foreign exchange basket was a
combination of various creditable foreign currencies.
Some experts maintain that the
measure which took place two years ago has had many positive effects on the
country’s economy. In general, some experts have noted that replacement of the
dollar for euro has been a suitable measure due to the type of trade and
industrial exchanges in the country. They maintain that the parity rate of
euro against the dollar has been constantly changing in favor of euro in
recent years and the same trend can be expected in the foreseeable future.
Some analysts also maintain that
the replacement will lead to dynamism of foreign exchange rate in the Iranian
economy, relative reduction in the price of Iran’s tradable goods, an increase
in the trade balance and a rise in non-oil exports revenues all as a result of
valuation of euro against the dollar.
Arsalan Fathipour, chairman of the
Majlis Economic Commission, has noted that replacement of euro is in line with
the rules of free trade. He added, “The global economy is witnessing
international convergence in line with policies of the World Trade
Organization for liberalization of economy and trade.”
Referring to increased value of
euro against the dollar and that Iran’s major trade patterns are EU members,
the MP said that replacement of euro for dollar will be beneficial to the
Iranian economy, especially in foreign trade, both at present and in the
future.
Chairman of the Majlis Economic
Commission further stated that the measure and its comparative advantage for
Iran in Europe will increase volume of foreign trade while, on the other side,
raise foreign exchange revenues and strengthen the balance of foreign payments
more than before.
He added, “If we could invest our
foreign exchange reserves in productive fields, that replacement would have
positive effects in the form of more added value and job creation in
productive and advantageous fields.”
Also, Alireza Monadi, member of the
Plan and Budget Commission of the Iranian parliament pointed to calculations
done on the basis of euro and noted that this has been a positive measure.
Monadi noted that, at present, the replacement would not be costly for the
country and all indicators point to a positive decision. He added that
replacement of the dollar with euro has greatly benefited the country and,
given the current economic crisis in the world, it has been a right step taken
by the government.
Anyway, some industrial activists
maintain that due to fluctuations in the value of euro and relative stability
of the dollar and also because of increased value of euro against rial, they
have lost part of the ability to repay debts and during the past few years,
the expenses of industrial units and producers have increased as much as 50
percent due to the increased value of euro.
Referring to the main philosophy of
establishing the Oil Stabilization Fund, some analysts maintain that the OSF
has distanced from its early goals and due to replacement of euro for the
dollar and withdrawals from the Oil Stabilization Fund, nobody could give an
accurate opinion about it because its nature has changed. In general, although
many discussions have been conducted on the need to change the name and nature
of the Oil Stabilization Fund, some experts cannot give a clear account of the
Fund and maintain that the Oil Stabilization Fund was established according to
the law; but at present, it is not similar to the institution which had been
established according to Article 60 of the Third Economic Development Plan Act
or Article 1 of the Fourth Economic Development Plan Act. |
