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Iran’s Foreign Currency Reserves Depleted

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Iran’s Foreign Currency Reserve Account has reached a zero balance despite high oil prices in recent years, the Iranian National Audit Organization announced.

Mehr News Agency reports: “Lack of proper supervision of plans and the failure to follow up on the necessary payments has depleted the Foreign Currency Reserve Account in the years 2008 and 2009.”

Mahmoud Ahmadinejad would not reveal the 2009 balance, calling the information classified. But he said the amount of the balance “is unprecedented in the whole history of the country.” He stated, however, that there are sufficient reserves in the account to last for several years of national need.

Last November, Shamseddin Hosseiny, Iran’s Minister of Finance announced that Iran’s foreign currency reserves equalled $100 billion and its foreign debt $20 billion.

A month later, however, when Parliament called for further development of Tehran subway system, Hosseiny maintained that the Currency Reserve Account was empty and there were no funds for the subway system.

The Foreign Currency Reserve Account was set up in 2000 by Mohammad Khatami’s government, following the economic shock caused by a sudden plunge in the price of oil.

The account aimed to buffer the economy from volatile oil revenues by investing those revenues in various Iranian manufacturing and industrial activities, giving needed credit to the private sector to develop domestic production capacity.

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