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Iran 'unhurt' by oil price fall

Oil refinery near Tehran - 2007
Iran relies on oil for 89% its government revenues

Iran's President Ahmadinejad has said his country will not be damaged by falling oil prices.

This is despite the fact that the country relies on oil for the vast majority of its export earnings and government revenue.

He insisted the fall in oil prices would not cause major problems, even if it dropped to five dollars a barrel.

The BBC's Tehran correspondent says many economists will be very sceptical about the president's analysis.

Just as the world banking crisis has had no impact on Iran's economy, neither will the oil price have that much impact
Mahmoud Ahmadinejad
Jon Leyne says that for every one dollar drop in the price of oil, Iran has lost around a billion dollars a year in revenue.

In recent days the price of oil slumped below $50 a barrel - barely one-third of the price earlier in the year.

Mr Ahmadinejad's government has been spending freely on social programmes at home, as well as helping its allies abroad.

So no-one knows how much, if any, of the windfall from higher oil prices ever made it into the reserves that are supposed to protect Iran against these leaner times, our correspondent says.

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