Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil Revenues
Dependency of Iranian Economy on oil revenues has provided conditions for imposing further sanctions on Iran. One way for Iran to get rid of sanctions is to sell its oil in currencies other than US dollar. In this regard, this article evaluates the risks for Iran if it, in selling oil, substitutes U...
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| Format: | Article |
| Language: | fas |
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Tarbiat Modares University
2021-09-01
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| Series: | پژوهشهای اقتصادی |
| Subjects: | |
| Online Access: | http://ecor.modares.ac.ir/article-18-49960-en.pdf |
| _version_ | 1797803179468914688 |
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| author | Sakineh Dehghanian Kazem Yavari Mehdi Hajamini |
| author_facet | Sakineh Dehghanian Kazem Yavari Mehdi Hajamini |
| author_sort | Sakineh Dehghanian |
| collection | DOAJ |
| description | Dependency of Iranian Economy on oil revenues has provided conditions for imposing further sanctions on Iran. One way for Iran to get rid of sanctions is to sell its oil in currencies other than US dollar. In this regard, this article evaluates the risks for Iran if it, in selling oil, substitutes US dollar with currencies of its oil importing countries. We firstly apply Autoregressive Integrated Moving Average (ARIMA) and Self-Exciting Threshold Autoregressive (SETAR) models on Yuan and Rupee data for the period of 1990:01-2019:05 as well as on Euro data for the period of 1999:01-2019:05 and then based on the estimated models, forecast losses and gains for the period of 2019:06-2021:12 if Iran sells oil to China, India and Europe and receive payments respectively in Yuan, Rupee and Euro. Our forecasts indicate that selling oil to India and China and receiving oil revenue in Rupee and Yuan respectively will significantly decrease value of oil exports in range of 5-23 percent due to very likely devaluation of these currencies vs. the US dollar. Therefore, Iran must firstly use in its oil transaction relevant diplomacy with its oil importing countries, requesting them to share in risks of devaluation of their currencies vs. US dollar. Secondly, as a particular example, this article shows that political decisions may bring in economic consequences for the country. Therefore, Iranian authorities are expected to consider economic consequences of their political decisions more seriously and with sufficient transparency. |
| first_indexed | 2024-03-13T05:16:58Z |
| format | Article |
| id | doaj.art-33c6bd2065534b51adc6e5c3f156c2de |
| institution | Directory Open Access Journal |
| issn | 1735-6768 2980-7832 |
| language | fas |
| last_indexed | 2024-03-13T05:16:58Z |
| publishDate | 2021-09-01 |
| publisher | Tarbiat Modares University |
| record_format | Article |
| series | پژوهشهای اقتصادی |
| spelling | doaj.art-33c6bd2065534b51adc6e5c3f156c2de2023-06-15T20:25:30ZfasTarbiat Modares Universityپژوهشهای اقتصادی1735-67682980-78322021-09-01213118Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil RevenuesSakineh Dehghanian0Kazem Yavari1Mehdi Hajamini2 M.A. Student of Economics, Yazd University, Yazd, Iran Faculty of Economic, Management and AccountingYazd University Assistant Professor, Department of Economics, Yazd University Dependency of Iranian Economy on oil revenues has provided conditions for imposing further sanctions on Iran. One way for Iran to get rid of sanctions is to sell its oil in currencies other than US dollar. In this regard, this article evaluates the risks for Iran if it, in selling oil, substitutes US dollar with currencies of its oil importing countries. We firstly apply Autoregressive Integrated Moving Average (ARIMA) and Self-Exciting Threshold Autoregressive (SETAR) models on Yuan and Rupee data for the period of 1990:01-2019:05 as well as on Euro data for the period of 1999:01-2019:05 and then based on the estimated models, forecast losses and gains for the period of 2019:06-2021:12 if Iran sells oil to China, India and Europe and receive payments respectively in Yuan, Rupee and Euro. Our forecasts indicate that selling oil to India and China and receiving oil revenue in Rupee and Yuan respectively will significantly decrease value of oil exports in range of 5-23 percent due to very likely devaluation of these currencies vs. the US dollar. Therefore, Iran must firstly use in its oil transaction relevant diplomacy with its oil importing countries, requesting them to share in risks of devaluation of their currencies vs. US dollar. Secondly, as a particular example, this article shows that political decisions may bring in economic consequences for the country. Therefore, Iranian authorities are expected to consider economic consequences of their political decisions more seriously and with sufficient transparency.http://ecor.modares.ac.ir/article-18-49960-en.pdfexchange rateoil revenuesforecastingtime-series models |
| spellingShingle | Sakineh Dehghanian Kazem Yavari Mehdi Hajamini Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil Revenues پژوهشهای اقتصادی exchange rate oil revenues forecasting time-series models |
| title | Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil Revenues |
| title_full | Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil Revenues |
| title_fullStr | Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil Revenues |
| title_full_unstemmed | Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil Revenues |
| title_short | Risk Assessment of Selling Oil in Rupee, Yuan and Euro: A Case Study of Iran’s Oil Revenues |
| title_sort | risk assessment of selling oil in rupee yuan and euro a case study of iran s oil revenues |
| topic | exchange rate oil revenues forecasting time-series models |
| url | http://ecor.modares.ac.ir/article-18-49960-en.pdf |
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