Iran’s plan to get rid of the subsidized exchange rate
Iran's subsidized exchange rate has failed to prevent the downfall of the rial — and a move to do away with it could actually help the economy.
There are signs that Iran will officially get rid of its official subsidized exchange rate — at 42,000 rial to one US dollar — by the end of the current Iranian year on March 20, 2022. If implemented correctly, the move could actually help the Iranian economy find a new balance, but the question is whether political and socioeconomic realities will allow the government to implement a sound approach to exchange rate policy.
Iran currently uses three different exchange rates: the official subsidized rate, the market rate, and a rate controlled by the central bank available to importers and exporters of essential goods. The latter is known as the NIMA rate.
