New forex policy frets Iran's auto parts makers

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TEHRAN, Aug. 12 (Xinhua) -- Iran's auto parts makers expressed deep concerns over the fate of their business due to the new forex policy, local media EghtesadOnline reported Sunday.

Abdolnasser Hemmati, newly appointed governor of the Central Bank of Iran, announced last week new state monetary policies to heal the hobbled forex market.

According to the new policies, the government will no longer grant subsidies in U.S. dollars at a discounted rate to imported items except for essential goods and medicines.

Auto parts makers believe the latest policy does more harm than good to the beleaguered sector as auto parts and the raw materials used by local manufacturers are not considered essential.

"Following the implementation of the new monetary policy, a hike of 80 to 140 percent in prices of auto parts is foreseeable," said Arash Mohebinejad, spokesman of Iranian Specialized Manufactures of Auto Parts Association.

Carmakers and distributors "owe an outstanding debt of some 3.5 billion dollars to parts makers from which 1.1 billion dollars are overdue," he explained.

A total of 100 domestic auto parts makers have either closed their production facilities or put their business on hold because of the unstable state of affairs, Mohebinejad noted.

U.S. President Donald Trump withdrew Washington from the 2015 landmark Iranian nuclear pact in May, causing volatility in various markets in Iran.

Since then, the value of the Iranian rial has plunged to unprecedented lows, wreaking havoc on its import-dependent industries.

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