Real Exchange rate

In the Iranian economy, part of the government's fiscal policies and liabilities is always financed by banks. As government debt to banks increases, the private sector's access to loans and facilities is limited. It can cause undesirable macroeconomic outcomes. This study investigates the macroeconomic effects of government debt on banks in Iran over 1972–2016 by using an SVAR model. Results show that government debt to banks does not significantly affect the aggregate demand ratio to aggregate supply and GDP per labor. Still, it significantly increases the real exchange rate and decreases the non-tradable goods' ratio to tradable goods prices. In the long-run, the real exchange rate, the ratio of non-tradable goods to tradable goods price, and the general price level changed by 34.46, 20.95, and 46.4 percent, respectively, which can be explained by the government debt to banks. Results indicate that the government policy manages the Iranian economy.

This article examines the relationship between crude oil trade, economic growth, and the real exchange rate in Iran from 1979 to 2023, utilizing the Autoregressive Distributed Lag (ARDL) approach. The findings indicate that crude oil exports have a negative and statistically significant influence on the real exchange rate. Conversely, crude oil imports have a positive and significant effect on the real exchange rate. Additionally, the budget deficit from the previous period has positively impacted the real exchange rate. Gross Domestic Product (GDP) has also demonstrated a significant positive effect on the real exchange rate. In contrast, the monetary base has shown a significant negative effect on the real exchange rate. Long-term analyses reveal that oil export variables negatively affect the real exchange rate, while crude oil imports contribute positively. Over the long term, GDP maintains a significant positive effect on the real exchange rate, whereas the budget deficit and monetary base variables do not significantly influence the real exchange rate. Short-term dynamics suggest that the real exchange rate from the previous period positively and significantly affects the current real exchange rate. Moreover, the budget deficit variable in the current period negatively and significantly impacts the real exchange rate. The monetary base also has a significant negative effect on the real exchange rate; Central Bank assets have been utilized as a proxy for the monetary base. Key Words: Oil exports, oil imports, real exchange rate, ARDL approach.