Commodity Easing

The central bank says the current falling oil and commodity prices is expected to ease pressure on outflows in the next two months and an increase in remittances in November and December is expected to reverse an "overall dip in foreign currency reserves" that has taken place in October.
Meanwhile petroleum bill payments had also been postponed through an Iranian government credit from four to seven months, which the central bank says is expected "ease the pressure on the foreign exchange market during the next couple of months."
"These favourable trends are expected to result in continued stability in the foreign exchange markets," the Central Bank said.
However economic analysts have warned that trade transactions have little to do with foreign exchange pressure, which is a monetary phenomenon arising from central bank liquidity injections or 'printed money' which exceed dollar inflows in a given period.
Recent forex market interventions, to defend a peg at 108.00 rupees to the dollar have caused a severe cash crunch in the monetary system.
The shortage of rupees caused by its forex market interventions have been filled by printing money to purchase treasury bills, relaxing access to the reverse repo window so that market participants can access more printed money more easily than before and cutting the reserve ratio and releasing money tied up inside the central bank.