Iran’s Central Bank to Implement Offshore Rial Plan for Trade with Afghanistan and Iraq, 31 DEC

 Iran’s Central Bank to Implement Offshore Rial Plan for Trade with Afghanistan and Iraq, 31 DEC

Mohammad Reza Farzin, the chief of Iran’s Central Bank, has announced the initiation of an offshore rial plan. This plan aims to allow Iranian exporters to conduct their trade with Afghanistan and Iraq using Iranian rials, marking a significant shift in Iran’s monetary policy. This move, which has been under consideration for several months, is designed to facilitate the settlement of trade obligations with these neighboring countries using local currency.

Offshore Rial Plan: A Solution for Exporters

The offshore rial plan has emerged in response to the demands of traders from Mashhad, a prominent city in Iran. They have been advocating for the ability to export to Afghanistan using the Iranian currency. Implementing transactions in rials is expected to streamline financial processes and lessen dependence on foreign currencies.

Economic Impact of the Offshore Rial Plan

It’s critical to note that this economic maneuver comes at a time when Iran is grappling with the ramifications of international economic sanctions and the plummeting value of the rial. Increasing interest rates on bank deposits and closing bank accounts suspected of disrupting the foreign exchange market are among the other measures taken to counter the fall of the rial.

Trade Relations between Iran, Afghanistan, and Iraq

The recent developments in monetary policy also shed light on the trade relations between Iran, Afghanistan, and Iraq. Currently, trade between Iran and Afghanistan is conducted in dollars. However, the offshore rial plan is expected to change this scenario. The Ministry of Industry and Commerce of the Taliban revealed that Afghanistan had exported about six million dollars worth of goods to Iran in the first four months of the current year, with total imports from Iran estimated to be around 506 million dollars. Primary export items from Iran to Afghanistan include foodstuffs, petroleum products, and various building materials.

https://bnnbreaking.com/world/afghanistan/irans-central-bank-to-implement-offshore-rial-plan-for-trade-with-afghanistan-and-iraq/