Date: 12 Mar 2000
Time: 18:09:25
Remote Name: 24.30.137.96
03/11/2000 Agence France-Presse (Copyright 2000)
TEHRAN, March 11 (AFP) - The Iranian rial has hit its highest rate against the greenback for some 11 months after the government flooded the market with petrodollars, foreign exchange dealers said Saturday.
The rial strengthened from some 8,250 to the dollar to below 8,100 this week as the central bank, inundated with dollars as a result of soaring oil prices, tried to improve the exchange rate, the dealers said.
In January the Iranian parliament authorised the government to sell up to 800 million dollars of its foreign exchange surplus created by higher than expected oil export revenues during the current budgetary cycle.
President Mohammad Khatami's government had asked parliament, as part of an amendment to its annual budget, to authorise the sale of part of the excess revenues in order to "satisfy its rial needs and to pay off the budget deficit" of several state bodies, such as the education ministry.
The government originally said it expected to achieve 11.8 billion dollars in oil revenue in the Iranian year 1379 which begins March 20, based on a barrel price of 13.80 dollars.
But in the last few weeks oil prices have soared above 30 dollars a barrel amid uncertainty over whether the Organisation of Oil Exporting Countries (OPEC), including Iran , will agree to raise output at a meeting on March 27.
Oil revenue constitutes 85 percent of Iran 's foreign exchange earnings. For two years, the weakness of the oil market has caused a budgetary shortfall of at least five billion dollars.
But a rising oil market over the last year has boosted Iran 's foreign exchange earnings. OPEC's second largest oil producer, Iran currently produces around 3.7 million barrels per day, of which 2.4 million barrels are exported.
The country's proven oil reserves stand at 90 billion barrels, while gas reserves are pegged at 20,000 billion cubic metres.
The official exchange rate, fixed by the central bank, pegs the dollar at 3,000 rials.
The Iranian government decided to freeze exchange rates in May 1995 in order to stop capital flight and stabilise the rial.
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