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Iran's Government Withdrew Money From National Reserve To Pay Salaries - Lawmaker

Empty highways in Iran show the potential impact of the coronavirus on the country's economic situation. March 28, 2020

A member of Iran’s parliament has said the government took 18 trillion rials from the National Development Fund on the eve of the Iranian New Year in March because it was out of money to pay salaries and New Year bonuses to its employees.

The National Development Fund (NDF) is savings from oil exports meant to help long term projects benefitting future generations. The amount mentioned by the lawmaker is around $420 million based on the official exchange rate.

Mohammad Hosseini who is one of parliament’s supervisors of government operations told Fars news agency April 5 that the government’s action was “illegal” and if the parliament is “smart” it can force President Hassan Rouhani’s administration to return the money.

However, no government authority can withdraw money from NDF without the permission of Supreme Leader Ali Khamenei. This means no one, including the parliament, can challenge the decision of withdrawing money to pay New Year salaries and bonuses.

President Rouhani in March asked the Supreme Leader for permission to take one billion dollars from NDF but there has been no news about Khamenei’s response.

Pressed by U.S. sanctions which have cut off crude oil exports, Iran has repeatedly withdrawn money from the NDF in the past two years. The amount in the fund is kept secret, but estimates range from $35-70 billion. With the coronavirus crisis the economic situation and government finances have worsened.

Rouhani on April 2 said the country has enough foreign currency reserves this year, in what might be a reference to the National Development Fund.