Iran restricts import of ‘luxury goods’ to address forex shortage

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An Iranian couple check out a vintage sports car. Photo – Behrouz Mehri/AFP/Getty

Iranian media quoted trade officials as saying on Thursday the government has frozen the import of more than 2,000 “luxury goods” in its bid to stem the shortage of foreign currency caused by Western sanctions.

According to partial lists published by various media outlets, the prohibited products include various brands of cosmetics, confectionery, clothing and jewellery as well as cars, construction materials, computers and cellphones.

According to deputy trade minister Hamid Safdel, the measure could save Iran $4 billion a year. He also confirmed that the ban is also being imposed to promote locally produced products.

The government official conceded that import ban on certain items, such as computers and cellphones, would be removed should the Iranian industry fail to manufacture them.

Iran is struggling under severe sanctions imposed by the US and EU to curb its nuclear programme. Tehran insists it is an “economic war” and says it is taking measures to effectively counter them, including moves to reduce its oil exports.

The country’s currency, rial, is under intense pressure due to the Western trade embargo and have caused a shortage of foreign currency. Inflation has also soared to 24% annually.

According to official figures, Sanctions imposed on the banking sector has resulted in a 10% decline in Iranian imports to $26 billion in the six-month period from March 2012 compared to the same period last year.

Most imports in the period comprised raw materials, intermediate product and industrial spare parts.

Figures also show that consumer products, including those declared as luxury by the trade ministry, accounted for nearly 28% of total imports in the six-month period.

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