Preferential Currency Was Anti-Production

TEHRAN (Iran News) Speaking Tuesday evening on a television program about the removal of the preferential exchange rate and the state of agricultural production, Gholamreza Nouri Ghezeljeh told IRNA that regarding the prices of 11 items included in the electronic ration card (voucher) system, a decision was made—given exchange-rate fluctuations—to determine prices based on a two-month average of the second exchange hall rate and the rate traded in the negotiated market, in order to stabilize essential goods and food items.

He explained that this approach is intended to prevent daily price changes in food and essential goods, noting that the import, production, and distribution process requires two to three months to ensure market stability.

The minister said the current exchange rate in the second exchange hall stands at 112,500 tomans, adding that the price gap between the preferential exchange rate and the second hall rate across essential goods is now about 700,000 tomans.

Nouri Ghezeljeh stressed that all resulting price increases will be compensated through the electronic voucher system, noting that the one-million-toman amount, set with the emphasis of the President, exceeds the actual impact of price increases on these goods.

He said that full monitoring is being applied to inputs and goods whose preferential exchange rates have been removed, with price ceilings and maximum allowable prices in place. If prices reach or exceed these limits, intervention will occur.

“If the market receives inputs at free-market rates, we calculate the final cost,” he said. “If cooking oil costs 217,000 tomans to produce, there is no justification for selling it at 227,000 tomans. That would constitute abuse, and such practices will be addressed through oversight.”

However, he added that the government does not intend to impose rigid price controls, noting that prices are likely to remain below the ceiling as the market moves toward a competitive environment, where profits are expected to decline and productivity to improve, helping maintain market stability.

Reiterating that the 112,500-toman exchange rate will remain in place for two to three months to avoid weekly increases, Nouri Ghezeljeh said the one-million-toman voucher amount was calculated by the Ministry of Welfare based on minimum calorie requirements.

He emphasized that if the base exchange rate rises again, the government will compensate the difference through the voucher system.

The minister noted that the impact of the preferential exchange rate on prices was less than 40 percent for poultry, under 15 percent for red meat, and 100 percent for cooking oil.

Addressing price increases for chicken and household cooking oil, he said that while the removal of the preferential exchange rate leads to higher prices for essential goods, the difference will be fully compensated for citizens.

He stressed that people’s purchasing power will be preserved, adding that the one-million-toman figure is at least 200,000 tomans higher than the actual impact of price increases on essential goods.

Nouri Ghezeljeh said the government has guaranteed access to essential goods through voucher credits, enabling every Iranian citizen to obtain a specified amount of essential calories each month. He noted that household choices will determine which goods are purchased in greater or lesser quantities.

He added that by removing the preferential exchange rate and relying on market-based pricing, the government—through vouchers and supportive mechanisms—will maintain purchasing power. While base prices may rise, compensation mechanisms ensure affordability.

The minister said the primary objective of this policy is to implement the Supreme Leader’s guidance issued in September, emphasizing the need to protect people’s livelihoods and preserve the purchasing power of low-income groups, ensuring monthly access to essential goods.

On price monitoring, he said there is no justification for price increases beyond the exchange-rate adjustments for essential agricultural goods.

He noted that red meat prices have not seen significant changes because the preferential exchange rate for red meat was removed months ago, resulting in price equilibrium between domestic and foreign markets. Products such as cooking oil, which were previously affected by preferential currency, had already been sold at regulated prices for more than two years.

He added that the impact of preferential currency on poultry prices had previously exceeded 60 percent, but had recently declined to below 40 percent, with other costs—such as transportation—now playing a greater role.

He noted that over the past 1.5 years of the current administration, the government has consistently ensured food and food security, adding that even during the 12-day war, no food supply problems emerged. “I commit, based on experience, that food security will be ensured under any circumstances,” he said.

The minister said that currency reforms and the removal of preferential exchange rates have eliminated some export barriers for certain inputs, encouraging producers to focus on productivity, diversified import sources, lower input costs, and the export of high-quality, competitively priced products.

He added that these changes are expected to strengthen the presence of small companies, activate unused capacities, boost the agricultural economy, expand exports, and improve productivity.

Nouri Ghezeljeh said Iran required about 25 million tons of essential goods and inputs, noting that in a free economy, transparency improves. He said previous restrictions—imposed due to preferential currency and monitoring requirements—had the potential to create distortions, whereas a free and transparent import market allows transactions at negotiated prices.

He concluded that producers will increase capacity, exporters will no longer face preferential currency distortions, and competition with global markets will become transparent, leading to greater clarity in import and export pricing and fewer unjustified price anomalies.