Renewing his warnings on the impact of the global financial crisis on the Iranian economy, Mahmoud Bahmani, the governor of the Central Bank of Iran (CBI), called on the Mahmoud Ahmadinejad's administration to reexamine Iran's foreign trade policies.
Dismissing Ahmadinejad's earlier remarks that "Iran's vulnerability to the global economic crisis is approximately zero," Bahmani noted that decreased demand for oil and diminishing oil revenues are among the effects of the crisis on the Iranian economy, predicting a continued fall in Iran's oil revenues through the Iranian year of 1388 [2009-2010].
An hour after Mehr News agency published his warning Bahmani conducted another interview with the news agency, this time claiming that CBI and other government institutions had succeeded in lowering the inflation rate in the past six months.
In the second interview Bahmani said that the administration had promised CBI to take into account the bank’s recommendations in its policy package.
In his assessment of the country's economic conditions for 2009-2010, Bahmani said, "From the policy perspective, the sector in the Iranian economy that was most vulnerable and could be impacted from the global financial crises, is Iran's foreign economic relations with other economies." Bahmani added, "The impact of the slowdown in the global economic growth rate would sooner or later find its way into our country, through lower global demand for oil, resulting in lower oil prices after a relatively long period of high oil prices. If the present situation persists, we would experience a fall in oil revenues.'
The warning of the chief banker come after President Mahmoud Ahmadinejad described the global financial crisis as a golden opportunity for the Islamic Republic. According to Ahmadinejad, the crisis "has presented us with opportunities, as the price of certain goods has fallen considerably, and this is an opportunity for us, which we can use to implement groundbreaking measures."
Last fall, economists from various universities across Iran had sent a letter to the president criticizing the administration's economic policies and warning about its impact on the domestic scene.
The letter, which was signed by 60 university professors, requested that Ahmadinejad and administration officials "accept, with open eyes, the reality that this crisis is resolvable only through the enactment and implementation of coordinated measures and policies by all countries."
In their letter, while dismissing Ahmadinejad's claim the global economic downturn had not impacted the Iranian economy, the economists insist that, "The serious impact of this crisis, whether through falling value of assets, falling oil prices and production levels, or falling investment and employment rates, would affect all countries, rich or poor, oil producing or non-oil producing."
