The impact of sanctions on the exchange pressure market among sanctioned countries (Iran and Russia)

Subject Areas : Monetary Economics

Mohammad Hassan Fotros ¹ , Maryam Mazhary Ava ^{2 *}

1 - Professor of Economics, Faculty of Economics and Social Sciences, BU-Ali Sina University, Hamedan, [e-mail]
2 - Assistant Professor, Department of Economics, Saravan University, Sistan Baluchistan, [e-mail] (Corresponding Author)

Received: 2024-08-31 Accepted : 2025-02-02 Published : 2025-02-02

Keywords: ARDL, Sanctions, Exchange Pressure Market, Iran, Russia JEL Classification: .C40, D72, F31, N25,

Abstract :

The currency crisis is one of the most important issues faced by different countries. The existence of a currency crisis in countries leads to pressure on the currency market. The purpose of this research is to investigate the impact of sanctions on the pressure of the foreign exchange market among the countries of Iran and Russia. Therefore, by using the data related to the years 2000-2023 and extracting it from the central bank and through ARDL, the impact of sanctions on the pressure of the exchange market was investigated. The estimation results for Russia show that in the short term sanctions have a negative effect on the pressure of the foreign exchange market. However, in the long term, the error correction estimation results indicate the lack of significance of the negative coefficient of sanctions for Russia. Also, economic growth in the short term has a positive and significant effect on the exchange market pressure, and government spending also has a positive and significant effect on the exchange market pressure. The results of the ARDL approach for Iran's economy indicate that the coefficient of sanctions is negative and significant. Economic growth in the short and long term has a negative effect on Iran's economy, and government spending also has a negative and significant effect on the pressure of the exchange market. Also, the estimation results of the model showed that the negative effect of sanctions in the long term is not significant. In the comparison between the two models estimated for the economy of Iran and Russia regarding the impact of sanctions on the pressure of the exchange market, the results show that in both countries, sanctions have a negative and significant effect only in the short term.

References:

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