CBI Says Currency Fears Are Gone

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CBI Says Currency Fears Are Gone

According to the Central Bank of Iran’s deputy for economic affairs, despite difficult moments which contributed to the historic drop of the rial against the US dollar, the Central Bank of Iran has however managed to manage foreign exchange rates and boosted a relative stability in the forex market. The deputy for economics adds that they are able to control the fluctuations that were impacted by the Arba’aeen trips to their neighbors that are Iraq and the US presidential vote.

The Iranian foreign exchange market has had a difficult time with its double official and unofficial market rates in 2016 which show the Rial weaken to 41,500 per dollar. It has however strengthened to 40,000 to the dollar and was quoted at 38,100.

According to the comparison done by Qorbani, Iran experienced a fluctuation of 22.9% compared to other countries from July 2013 to January where the Euro, the Canadian dollar, the Norwegian Krone registered 3.25%, 27%, 43% respectively.

The Deputy for economic affairs says that unnecessary attention is paid to the dollar in Iran, while the greenbacks wield influence on Iran’s imports, and is not of much significance. The CBI official notes that as the dollar strengthens the buyers’ prices raise as if the goods in question were bought in Euro because the sensitivity towards the greenback runs high. The CBI official finalizes that they have to define the role of the dollar despite the fact that the dollar has no role in the foreign trade sector.

Questioned if the exchange rates will be unified by the end of the financial year as promised and how the presidential election played a role, he said that they want to have a gradual rate amalgamation and an increase in communicator banking relations in qualification. However, they would not have reached an appropriate level.

With 238 international banks that have correspondent relations with Iran, it is evident that the trend is reportedly improving. Noting that during last year, the rates were higher than 29% while they have now come down to 18% evidently supporting the fact that interbank lending rates have been balanced as a result of the policies implemented by the central bank.

Qorbani said that supporting small and medium-sized businesses and improving the housing sector as two important major policies on the CBI agenda. Finally, the CBI official says that 3.82 quadrillion rials have been paid which is equivalent to 64.1%. This money was intended to inject working capital into small and medium-sized businesses to create a balance in various sectors.

On the other hand, in line with economic policies, the establishment of foreign banks in free trade zones has been the main agenda of the CBI. Ahmadi noted that the new regulations are together with policies to encourage the development of infrastructure, investment and job creation in the FTZs and economic growth. Based on those regulations that were compiled and refilled in the money and credit council, instructions concerning the activity of foreign banks in FTZs were issued as a stopgap measure. Ahmadi further adds that the banks, however, have to be able to absorb losses and continue with their services to customers even in difficult situations.

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CBI Says Currency Fears Are Gone

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