Iran FX and Inflation Report - Aban 1400 (October 23 – November 21)
Monthly inflation fell in the Iranian calendar month of Aban (October 23 – November 21). The easing in inflation was aided by the fact that while the free market exchange rate rose, the NIMA rate, used by Iranian importers, remained relatively stable.
___STEADY_PAYWALL___
In the FX market, the free market rate began the period at the rate of IRR 276,500 and rose IRR 287,200, a record high for this Iranian calendar year, before decreasing slightly to end the period at IRR 283,800. Meanwhile, the NIMA market sustained an increased average rate of IRR 233,801, with minor fluctuations between minimum and maximum rates of IRR 231,847 and IRR 236,659. The spread between the free market and NIMA rates widened, ending the period at IRR 47,479.
According to the data released by the Statistical Centre of Iran (SCI) the Consumer Price Index (CPI) rose to 373, meaning monthly inflation was 2.4 percent, down from 3.7 percent in the period month. The annual inflation rate fell from 45.4 percent in Mehran to 44.4 percent in Aban. The easing of inflation was led by a reduction in the monthly inflation of food and health prices, which declined 3.2 and 1.5 percent respectively. Monthly goods and services inflation declined, although monthly inflation in durable goods surged from 1.2 percent in Mehr to 4 percent in Aban.
Seyed Massoud Mirkazemi, head of the Planning and Budget Organization, tweeted that the easing inflation was a result of the Raisi government opting not to borrow money from the Central Bank of Iran despite the economic difficulties.
Another factor appears to be the stability of the NIMA exchange rate. Iran’s central bank governor Ali Salehabadi, cited an improvement in the government’s foreign revenue for the relatively stability in foreign exchange markets, noting that revenue has tripled compared to last year. Because of these higher revenues, Salehabadi claimed that the central bank faces no challenges in supplying the NIMA market. According to data from the central bank, so far in the Iranian calendar year 1400, USD 18.1 billion in foreign currency has been traded on the NIMA platform, a 69 percent increase compared to the same point last year.
