Week in Brief 07.06.2019

The Ministry of Industry and Trade has changed the regulations in the export of Iron-ore. From June 2019, only iron-ore producers are permitted to export this product and other traders cannot do so.

The reason that the government is imposing such restrictions is to control the return of the foreign money earned from exportation to the country. Since the devaluation of Iranian Rial in May 2018, the government obliged all the Iranian exporters to return their foreign currencies to the country. However, exporters selling below one million USD were exempted.

According to the Central Bank of Iran, during the last Iranian fiscal year, only 18.7 billion dollars of exported earning entered Iran and was declared. This amount is 60 percent of the non-petroleum export of the country, meaning that another 12 billion dollars has probably not been back.

It is believed that some traders use individual trading codes in order to break their export into amounts below one million dollar and be exempted from new regulations.

Since minerals and steel make the majority of Iranian non-petroleum export, now the government wants to limit their export to the producers only in order to be able to supervise the return of their foreign earning and supply the needed foreign cash to the market.

Beginning of June in Iran coincides with a couple of national holidays; 14th of Khordad (June 4) is Ayatolah Khomeini’s passing away anniversary, 15th of Khordad is the anniversary of 1963 protests in Iran against the arrest of Ayatolah Khomeini. This year these national holidays coincided also with Eid Fitr and the weekend, creating an ideal possibility for those who wish to travel.

However, a poll results show that 73% of respondents do not want to travel; where 55 percent of them claim that the economic difficulties prevent them from affording a trip.

From the rest, 27% of respondents who have planned a trip will visit destinations in the country and only 6% of participants in the poll will travel abroad.

Although it is understandable that the number of foreign trips has declined because of rising exchange rate, traveling within the country is not cheap either. Particularly in touristic cities of Iran, such as Kashan or Isfahan, many hotels set their prices considerably higher, adjusting it to foreign visitors. Such decisions ignore the local market and therefore sends the number of domestic trips down further.