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State banks in Iran continue to cut costs by selling off branches surplus to requirements
$2bn and Japan $1.5bn. Iran lately struck a barter deal with Baghdad focused on food and medicines to allow it to utilise the capital frozen in Iraq.
Tehran has previously threatened to sue South Korea over its capital frozen in Korean banks.
Before the reimposition of heavy US sanctions in 2018, South Korean annual exports to Iran were worth $4bn, while South Korea’s annual imports from Iran stood at $8bn, according to Radio Farda. South Korea's imports from Iran in the first half of the current Iranian calendar year (began March 20) were valued at a meagre $5mn, it added.
State-owned Iranian banks are continuing with cost-cutting strategies that hinge on shutting down high street banks viewed as surplus to requirements, according to an economy minstry report cited by Donya-e Eqtesad.
Bank Melli Iran (MBI), Bank Mellat, Bank Sepah (sometimes wrongly associated with the Islamic Revolutionary Guard Corps, or IRGC) and Bank Tejarat (Trade Bank) are among those closing branches.
The state lenders have reportedly sold off branch assets for IRR280tn ($1.2bn at the free market exchange rate, but $6.7bn at the official rate) since January 2018 to private developers. The buildings are typically turned into restaurants or are torn down to make way for apartment complexes.
In the period stretching from the start of President Hassan Rouhani's first term in 2013 to the end of 2017, the state banks sold IRR135tn of commercial real estate assets, the report noted.
Successive governments in Iran have mounted increasing pressure over the years to force banks to divest all non-core assets, including companies that have come under their control following bankruptcies, impaired loans and bad debts.
Earlier in August, MBI announced it had divested non-core assets (commercial real estate and other assets) valued at IRR17.4tn ($102) in the previous Persian year (ended March 19).
Last November, MBI failed to find a buyer for the National Development Investment Company, which it listed as having a value of €1.4bn. The business appears to have a level of debt that makes it unattractive to buyers. Other failed sales concern some retail bank branches in Tehran and elsewhere. MBI and other banks have attempted to dispose of them, but due to the ongoing inflationary effects of the severe devaluation of the Iranian rial, they have struggled to find buyers.
8.2 Central Bank policy
Iran's central bank updates directive on carrying or retaining foreign currency in cash
The Central Bank of Iran (CBI) has issued an updated directive dictating the amount of foreign currency in cash that people can retain or carry, LiT reported. According to the new directive, individuals can carry up to €10,000 or its equivalent in hard currency. The decree added that a person carrying or keeping more than this value in cash would need to have multiple documents showing they were entitled to do so. The move is the latest in a series of special measures brought in by the Iranian government to manage the free market, with the Iranian rial (IRR) hitting all-time lows against the dollar this week.
The updated central bank rules add that those who have more than €10,000 or its equivalent in hard currency have three months to either deposit their cash in a foreign currency bank account or sell it at an exchange bureau or credit
37 IRAN Country Report December 2020 www.intellinews.com
