The Iranian authorities have announced an easing of the exchange rate for the local currency for export sales of various products, including steel, a move fought for by market players for a while now. The change is expected to boost the country’s exports, particularly in the steel segment, which may support the mills especially in the upcoming period of natural gas supply cuts and, consequently, higher production costs.
According to local Iranian media, the Iranian central bank has issued a notification stating that there will be a change in the rules of local currency exchange for companies exporting steel, petrochemicals, non-ferrous basic metals and petroleum products, while previously it was mandatory to exchange the foreign currency sourced from exports of these products according to the governmental rate, which is much lower than the market rate.
According to the new regulation, Iranian exporters, starting from December 21, will be allowed to use a so-called agreeable rate, which is estimated at around $1 = IRR 60,000-65,000. The most recent governmental exchange rate has been reported by market players at $1 = IRR 54,000, while the free rate currently stands at $1 = IRR 73,000. “The Iranian government has a shortage of currency, so they want to protect exporters. Based on the new currency regulations, producers will be able to export more than traders,” a source told SteelOrbis, commenting on the situation.
