Iranian private sector representatives have urged the government to resolve what they describe as a contradiction between the liberalization of the exchange rate and the continued use of state-imposed price controls.
At the 118th session of Tehran province’s Government-Private Sector Dialogue Council, business leaders said recent foreign exchange policy changes had created severe pressure on companies’ working capital, as firms are now required to cover the gap caused by higher exchange rates.
Mahmoud Najafi-Arab, chairman of the Tehran Chamber of Commerce, said that with new currency policies now in place, businesses are struggling to cover rising costs stemming from the gap between subsidized and market exchange rates.
He added that as exchange rate reforms are implemented, mandatory price-setting, market regulation mechanisms and restrictive licensing have become ineffective and should be dismantled to allow the reforms to work.