Ahmadinezhad's instruction regarding the conversion of the country's foreign currency assets from dollars to euros cost Iran around 5bn dollars. This figure of loss is just the initial figure and definitely it will go higher as a result of continuous growth of America's currency, which will bring more loss by virtue of the measures taken by the ninth [present] conservative government. According to Ahmadinezhad in his recent TV interview, the goal of conversion of our foreign currency assets from dollars to euros was to damage America's monetary unit.
Last year, Mojtaba Samare Hashemi, the president's influential senior deputy did announce this intention of the ninth government. He said: Conversion of our foreign currency assets to euros was a measure based on Ahmadinezhad's genuine insight. While defending this policy at the onset of the financial crisis in US, the senior deputy of the president stressed: The drop in the value of the dollar brought high losses to the countries which saved their deposits in dollars. Samare Hashemi advised these countries to change their currency deposits from the dollar to other currencies.
As the result of recent increase of the value of dollar, Ahmadinezhad's inspirations to discredit America's monetary unit blew up and his rash measure brought about 5bn-dollar loss for the country. This shows the kind of outcomes that the so-called "genuine insights" of the high-ranking authorities of the ninth government can bring about for the country.
In those days when the monetary value of the world's largest economy with a volume of gross production amounting to 12,000bn dollars, momentarily decreased, Mahmud Bahmani, the present chief of the Central Bank, announced in one of the cabinet's meetings: This is very good for us because a large part of our currency basket is in euros.
However, it was during the same period that Pasha'i-Fam, the deputy of the Central Bank, announced in the conference on "Monetary world crisis, Iran's Challenges and Opportunities": In the past three months, the value of the dollar is strengthened by 2 per cent compared to the euro. He considered the situation to be a bad turn for Iran.
Last August he also said: Regarding the combination of currency assets of the country, the strengthening of the dollar will lead to a fall of the dollar value of Iran's assets outside the country.
According to ILNA [Iranian Labour News Agency], two years after the adoption of the above policy of conversion of dollars to euros that took place during the directorship of Ebrahim Sheybani in the Central Bank, the impact of the American and European economic crisis on Iran's economy, together with the adoption of preventive measures against sanctions gradually brought about opposite results.
According to this report, while a large volume of Iran's currency deposits was changed to euros during the weakening course of the value of the dollar in the world with initial positive outcomes for Iran, with strengthening of dollar's value in the world compared to the euro, a considerable volume of currency was subsequently lost.
Based on the existing documents in the Central Bank, more than 9.5bn dollars of the currency deposits gained as a result of the conversion of dollars to euros when the dollar dropped and the euro increased. And due to economic crises and strengthening of the dollar and drops in the euro more than 5bn dollars were lost.
This is while the authorities were warned that the profit gained by conversion of foreign currency deposits to euro will be temporary.
The figure obtained from the difference in fall of dollar and rise of euro in the balance sheet of the Central Bank is continuously increasing and it is unlikely that these deposits or the gained profit can no longer be maintained considering the rise in the value of dollar in the world market.
According to ILNA, following the unprecedented fall in the value of dollar in 1385 [2006-07] and the delivery of the bill of conversion of dollars to euros and other currencies, the ground for changing the currency of deposits was prepared and more than 70 per cent of the total value of currency deposits was converted into euros, other currencies and gold.
The measure was taken while many experts called it unpractical and warned against its future negative outcomes. As a result of difficulties arising from the conversion of monetary unit of deposits to euros, the approved bill in using euros in the budget, instead of dollars was not put into practice.
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