07/10/2013, 00.00
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Iranian currency collapse mainly affects health care

The rial drops following the latest round of economic sanctions. The public health sector is the most affected, with drug prices rising 76 per cent. For many Iranians, medicine is no longer affordable.

Tehran (AsiaNews/Agencies) - Tehran's attempts to counter the collapse of its national currency are having serious implications for the national health sector. The Iranian central bank, which until last week subsidised exchange rates applied to basic necessities, like food and medicines, de facto lifted them last Saturday. As a result, the Iranian currency has appreciated, making it nigh impossible for most Iranians to buy many imported drugs.

When the central bank opened on Monday, the new exchange rate was 102 per cent higher than on Saturday, 24,777 vs 12,260 rials, Tehran-based Etemaad newspaper reported yesterday.

Iran's parliament approved the removal of the old subsidised exchange rate on the condition that the government compensate patients and the Health Ministry, the country's biggest importer of medicines, for the rise in prices. However, the details of the compensation plan have yet to be worked out.

"A national health insurance [scheme] would be the best option to solve the medicine subsidies problem," Mohammad Hossein Qorbani, a member of the Iranian parliament's healthcare committee, told the Fararu news website. "But the Health Ministry and Social Security Organisation could not execute the necessary means."

Qorbani suggested that private insurance companies could play a role in the government's plans to compensate patients, but some reports indicate that several insurance companies have refused to refund fully policyholders for medicines that jumped by 40 to 90 per cent.

The economic sanctions imposed by the European Union and the United States have increased financial pressure on the Islamic Republic with the aim of dissuading Tehran from pursuing its nuclear programme.

The latest round of sanctions, the ninth of the Obama administration, kicked in on 1 July targeting Iran's national currency.

White House Press Secretary Jay Carney said that the new sanctions target Iran's currency "by authorising the imposition of sanctions on foreign financial institutions that knowingly conduct or facilitate significant transactions for the purchase or sale of the Iranian rial, or that maintain significant accounts outside Iran denominated in the Iranian rial."

If sanctions were not enough, Iran has had to cope with unprecedented inflation, with its currency losing two-thirds of its value in just two years, going 16,000 rials per US dollar in early 2012, to 36,000 on 30 April of this year.

"The idea is to cause depreciation of the rial and make it unusable in international commerce," said David Cohen, the Treasury Department's undersecretary for terrorism and financial intelligence.

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