Thursday, June 9, 2011

Rial Devaluated by 11%; Inflation Rising; Stagnant Growth Rate

The Central Bank of Iran (CBI) on Wednesday devaluated the national currency rial by nearly 11% against the dollar. CBI announced the rise in official exchange rate from 10,590 rials to 11,710 rials per US dollar. The unexpected move might signal CBI’s attempt to enforce a single exchange rate against the dollar. In exchange markets, the dollar is trading at higher value than the official rate.

Meanwhile, the statistics released by CBI showed a 26% rise in prices last month compared to the same period last year. The sharp rise in inflation rate in the month of Ordibehesht (ending 21 May) pushed the annual inflation rate to 17% [Donya-e Eqtesad, 9 June].

In other economic news, the World Bank today concurred with IMF on Iran's economic growth rate of one percent in 2010 and forecast a zero percent GDP growth for 2011. The World Bank also predicted a 3% growth for 2012.

1 comment:

Anonymous said...

Good for Iran. Whatever the market wants to do should decide the exchange rate. Countries with one "official" rate and one real rate are silly.