Planning and Budgeting

Iran’s Foreign Exchange Reserves Account (FERA) was established according to the article 60 of Iran’s Third Development Plan Law with the aim of stabilizing oil exports revenues, diverting FERA funds into other reserves and investments as well as materializing the Third Development Plan goals. This paper tries to investigate the issues related to and the performance of the FERA within Iran’s Third Development Plan period. The findings of this study indicate that governmental withdrawal from the account has exceeded the permitted limits. Governmental sector’s withdrawal sum proportion was 4.53 in contrast to that of non-governmental sector during the Third Development Plan period. Iran’s foreign exchange budget exceeded the Third Development Plan regulations within the period. Meanwhile, the sum deposited into FERA was 90.82 percent of oil revenues surplus. FERA withdrawal sum increased yearly. Such withdrawals led to increasing liquidity and inflation. Facilities paid to non-governmental sector were less than opened letters of credit, concluded contracts and approved programs within the Third Development Plan period