Iranian Parliament OKs Early Use Of Forex Deposit Acct
TEHRAN -(Dow Jones)- The Iranian parliament gave an early approval Tuesday
for the government to set up a foreign-exchange deposit account this year,
from which it can draw up to 50% to fund employment and export oriented
projects, Iranian state radio reported.
Tuesday's move came earlier than expected and was effectively an amendment
to the five-year development plan law for the period March 2000-2005, which
had originally stipulated that the deposit account come into effect in
2001 and be used in 2002.
The idea behind setting up this account was to protect government revenue
against the volatility witnessed in oil prices since 1998. Oil prices have
fluctuated in an approximate $20 range in the past two years. Income from
oil accounts for most of Iran's foreign-exchange revenue.
Under the deposit account plan, any oil income accumulated beyond an
annual target of $11.3 billion will be deposited into a savings account
at the Central Bank of Iran.
The use of the savings account has been brought forward as a result
of higher-than-expected oil prices in the past year.
The Iranian oil minister previously said if the price of oil stays above
$28 a barrel, Iran will be able to collect about $10 billion in extra income
by the end of the current year.
The value of the Organization of Petroleum Exporting Countries' basket
of seven crude oils averaged $29.44 a barrel Monday, up from $28.75 a barrel
Friday, OPEC's news agency Opecna said Tuesday.
Some of the income will also be used for the development of the oil
industry to improve the country's production capacity.
The parliament also said previously that the government will be able
to use about $125 million of any accumulated extra income to deal with
the consequences of the country's ongoing drought.