‘Multiple forex rate a major reason for corruption’

August 27, 2021 - 15:25

TEHRAN- The secretary-general of the Federation of Iranian Food Associations says that multiple foreign currency exchange rate is a major reason for the corruption in the economic system.

Emphasizing that one of the basic ways to return the country's economy to the desired track is to eliminate multi-rate forex, Rashid Azizpour said: "Certainly, there is nothing in multi-rate forex but rent-seeking and corruption”, the news portal of the Federation of Iranian Food Associations reported.

The most serious problem created by the multi-rate forex is rent-seeking, he reiterated, adding, “As long as there is such system it cannot be said that we are going to fight the corruption”.

As experience has shown, multiple exchange rates in the economy lead to rent-seeking for intermediaries and brokers, and the greater the difference in rates, the wider the rent-seeking, and the deeper the corruption and the harder it is to get out of it, he further explained.

Noting that we have experienced this issue over and over again in different years and periods, Azizpour added: "Our experience at different times has shown that corruption and rent-seeking increase sharply in periods when the currency is offered in multiple rates, and despite our best efforts, we have never been able to deal with the corruption that results from this.”

Iran’s multiple exchange rate economic system has been criticized by several economic and political bodies as well as scholars and experts, many still believe that creating these extreme changes in a situation where Iran's sanctioned economy has been severely affected by exchange rate fluctuations, will not be beneficial for the economy and is going to result in an inflation shock.

MA/MA

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