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Currency Devaluation Causes 36% Decline In Iran Free Trade Zone Imports

A truck transporting cargo from Afghanistan to be exported to India is seen in the port city of Chabahar, on the Gulf of Oman, February 25, 2019

Semi-official news agency ISNA on May 3 quoted the High Council of Free Trade Zones in Iran as saying that imports via free trade zones had a 36% decline during the last Iranian year (March 2018 – March 2019) compared to the previous year.

Mohammad Reza Abdolrahimi told ISNA that last year's total imports via Iran's free trade zones was $1.288 billion.

The Iranian government has established seven free trade zones at its ports and border areas to stimulate trade and international investments. The special zones offer tax and customs exemptions.

He added that imports included raw materials, manufacturing and engineering equipment and machinery, as well as consumer goods for the free trade zones.

The official attributed the decline to devaluation of Iranian currency and limitations caused by government regulations. The Iranian currency began a steep decline in March 2018 and lost most of its value. Eighteen months ago, 38,000 rials could buy one U.S. dollar and now the rate of exchange is more than 140,000 rials.

However, Abdolrahimi added that planning to boost exports has led to an increase in the import of raw materials and machinery while less consumer goods were imported.