The Parallel Market for Foreign Exchange in an Oil Exporting Economy: The Case of Iran, 1978-1990

July 1, 1995

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper provides a model for the determination of the parallel market exchange rate premium in a country where oil export earnings accrue directly to the government, and foreign exchange is centrally allocated for the importation of specific goods. Next, it studies the parallel market for foreign exchange In the Islamic Republic of Iran during the period 1978-90. The paper then examines the various time series properties of parallel market exchange rate in Iran, and the evidence of the role of oil and non-oil exports in the determination of the parallel market premium.

Subject: Currency markets, Exchange rates, Financial markets, Foreign exchange, International trade, Multiple currency practices, Oil exports

Keywords: Currency markets, exchange rate, exchange rate system, Exchange rates, foreign exchange board, market clearing condition, market premium, market rate, Multiple currency practices, Oil exports, predictable pattern, WP

Pages:
38
Volume:
1995
DOI:
https://doi.org/10.5089/9781451849035.001
Issue:
069
Series:
Working Paper No. 1995/069
Stock No:
WPIEA0691995
ISBN:
9781451849035
ISSN:
1018-5941

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