Tools to maintain positive trade balanceSunday, Jan 29, 2017We have seen a positive trade balance by the end of Azar this year (December 20, 2016), but this does not mean moving away from negative numbers; it means approaching the equal trade balance
Given the fluctuations in the foreign exchange market, it is expected that imports will fall and exports will grow substantially. The result will be that the trade balance will remain positive. The manufacturing sector is also facing numerous empty capacities which are intact. It requires both investment and exchange rate stability to enter target markets and consolidate its status. Therefore, the only event that determines the level of production is the control of exchange rate fluctuations and the support for producers to recover lost capacities.
It should be noted that export goods should be priced in a way that eventually it brings exporters reasonable profits, otherwise exporters offer their goods on the domestic market; it will lead to the saturation of the domestic market and will ultimately reduce production. In this regard, the growing changes in exchange rates are beneficial for exports and harmful for imports. Therefore, some measures should be taken to control imports so that importers cannot be provided with cheap currency and everybody continues their activities in a competitive environment because a boom in factories, taking advantage of the empty capacities, job creation, etc. depend on the support of the manufacturing sector.
International banking transactions are also another factor in the growth of trade and economy. If there are no conventional banking relationships, we will have to pay high costs for financial transactions apart from the prices of commodities. This is a barrier to participate in the international arena. After the implementation of JCPOA, the eleventh government established international relations with small banks, but we should not confine ourselves to it because our country's commercial capacities need large international banks.
The banking problem also depends on political issues. With regard to the implementation of JCPOA, Iranian banks should enter the international arena otherwise we are unable to achieve our original and favorable business position. Set-off, monetary treaties, membership in the WTO, and bilateral or multilateral agreements with neighboring countries are other factors for the trade balance growth.