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5.1.3 Gross international reserves
Iran’s gold Imami sovereign breaks IRR25mn barrier amid dwindling hard currency supplies
CBI has over €70bn in hard currency reserves
Iran’s gold sovereign of choice, the Imami, has again broken the IRR25mn barrier as buyers continue to purchase remaining stocks of the officially minted 18-carat coin, IBENA reported on June 18.
Iranians’ attraction to gold as a safe haven has intensified with hard currency supplies dwindling in Iran following legal changes suddenly brought in in early April to arrest the stark descent of the Iranian rial (IRR), hit by souring sentiment over Iran’s economic prospects in the face of hostility from the US Trump administration. The move banned open market trading of foreign exchange and made unofficial rates illegal.
In early May, a World Gold Council report said that gold coin and bar demand in Iran shot up to a three-year high of 9.3 tonnes in the first quarter as Iranians —correctly—anticipated that the consequences of deteriorating relations with the US would cause Tehran to introduce currency controls.
The Azadi gold coin, the former number one sovereign sold by the Central Bank of Iran (CBI), also reached a historic high on June 18, topping IRR24mn a coin, while smaller half-sovereigns increased in price accordingly.
According to the IMF in its Regional Economic Outlook on May 4, the value of Iran’s gross official reserves was estimated to reach $108.4bn in 2018. The country’s gross official reserves will experience a $13.3bn jump in the current year rising from last year’s $95.1bn.
The Central Bank of Iran (CBI) has more than €70bn in hard currency reserves, according to the National Development Fund of Iran (NDFI). However, as restrictions continue on trade and withdrawal of cash from forex reserves, the country is looking for ways to find new revenues of hard currency.
5.2 FTA, multilateral agreements
Trade between Iran and Russia’s Samara skyrockets under new PTA
Trade between Iran and Russia's Samara Oblast was up fivefold to $110mn in the first three quarters of last year from $23mn in 2018 as a whole, VKonline has reported.
The Russian city of the same name this week hosted an Iranian business delegation with proposals for boosting bilateral trade under the two-year preferential trade agreement (PTA) between Iran and the Moscow-led Eurasian Economic Union (EEU), which commenced in late October, top of the agenda. Trade between Iran and EEU members Russia, Kazakhstan, Kyrgyzstan, Armenia and Belarus now exceeds $1bn.
There are reportedly plans to open an Iran-Russia trading house in Samara. A Samara business delegation visited the northern Iranian province of Mazandaran in December.
Mikhail Mamonov, executive director of the Chamber of Commerce and Industry of Samara Region, confirmed the Iran/Samara trade figures.
Iran imports from Samara include agricultural products, in particular cereals, as well as several types of oils such as sunflower oil.
From Iran, the Russian region mainly imports ceramics and textiles, the Russian news report said.
"Today we not only meet the needs of the Samara region for most types of
21 IRAN Country Report March 2020 www.intellinews.com
