Petrochemical Exchange Rate Set at 37,500 Tomans; 'Farzin Dollar' to Be Phased Out

The government's currency policies are being pursued under the relative stability of the foreign exchange market, with the Central Bank gradually eliminating the 28,500 toman dollar from the economy. In the latest move, the exchange rate for petrochemical companies has been set at 37,500 tomans. Behzad Lamei, head of the Central Bank's monitoring department, stated that 'we concluded that in line with unification, the rate that serves as the basis for refining and petrochemical companies in the commodity exchange should reach 37,500 tomans.' He also mentioned that the 28,500 toman rate was initially set to 'prevent any shocks to the market and meet the real needs of the economy.' However, the Tasnim news agency reacted negatively to this decision, stating that 'it is unclear what reasoning the Central Bank has for this strange action in the year of controlling inflation.' Tasnim further reported that the Deputy Minister of Economy warned that the increase in the exchange rate for calculating the base price of petrochemical and refining products in the commodity exchange could lead to 'increased market prices for some products.' Ali Rouhani emphasized that this decision would increase government revenue from selling feedstock to liquid feed petrochemical companies by about 20 trillion tomans, and tax revenues from these companies, to be collected next year, would increase by about 10 trillion tomans. It appears that the government intends to compensate for part of its budget deficit by phasing out the 28,500 toman dollar and aligning the official exchange rate with the free market. In this context, the Ministry of Agriculture announced yesterday that the currency for all veterinary items, including medicines, vaccines, additives, veterinary raw materials, supplements, and concentrates, would be transferred to the second exchange hall. This directive from the Ministry of Agriculture signifies the official removal of the 28,500 toman dollar from this commodity group. This currency shift will significantly impact agricultural product prices in the medium term, leading to notable price changes for items such as red meat and chicken. On August 13, Alireza Peyman-Pak, Deputy Minister of Agriculture, wrote on the social media platform 'X' that the 28,500 toman dollar related to frozen meat for industrial and restaurant use has been eliminated. Rumors about the removal of the 28,500 toman dollar have been circulating since spring this year, with Jabar Kouchakinejad, a member of the Parliament's Planning and Budget Commission, stating on June 5 that this action would sharply increase the prices of goods on people's tables, including chicken and rice, and that drug prices would rise. Kouchakinejad emphasized that on the first day of implementing the 28,500 toman dollar, Mr. Farzin stated that the implementation of this plan would continue for at least two years; now, if they want to cut the 28,500 toman dollar under these circumstances, we will definitely face a crisis.