Page 62 - bne_Magazine_May_2018_print

62 I Eurasia bne May 2018
Officials in Iran have been at pains to point out that the country is not facing
a currency crisis, but a crisis in accessing currency notes. Currency in the form of letters of credit is said to be relatively eas- ily available to both the private or public sector. Only 5% of Iran's hard currency is estimated to be in the form of notes for sale in banks and exchanges. Iran report- ed a $17bn currency surplus for last year, with non-oil exports coming in at $47bn and oil exports recording $55bn.
Politicians and generals point fingers
The frustration on the street was echoed early on April 10 in the country’s parlia- ment when the summoned Central Bank of Iran (CBI) governor Valiollah Seif addressed MPs, only to find himself in the centre of a crowd of furious lawmakers shouting and cursing him live on state television. Speaker of Parliament Ali Larijani was seen to beg the representa- tives from several regions to take their seats, but the disturbance continued until other parliamentarians had to intervene. After normal business in the Majlis (Iran’s parliament) resumed, Seif was quoted as saying by Mehr News Agency that there were “signs of neighbouring countries’ plots [in the currency slump]”.
He added: “In the United Arab Emirates and Saudi Arabia, plans are being made to disrupt Iran’s forex exchange market. We need to keep calm and disappoint the enemies [from realising their plans].”
Seif further stated that rumours spread by social messaging application Tele- gram Messenger were part of the issue as channels with hundreds of thousands of followers were disseminating infor- mation on a minute by minute basis. Around half of Iran’s population
of 80mn subscribe to the app.
The central bank chief went on to add that the government had now moved to entirely remove the US dollar from international transactions and replace it with euros in trade.
That political statement by Iran’s top bank- er was echoed by Iran’s top general and Minister of Defence of the Armed Forces Amir Hatami. He remarked that the US Treasury Department “has employed 500
new currency regime had not received any details from the CBI on how to comply with the new regulation, further complicating matters, according to Press TV.
The new government rules state that a maximum $1,000 can only be sold to travellers and students. The buyer must present a valid visa in their Iranian pass- port and the ticket for their outbound journey to receive the cash. Dual citizen Iranians and those with a valid green card for the US or residency elsewhere are not eligible for the new rate.
Other rules include a ban on the possession outside a bank account of more than $10,000. The CBI has also stated that anyone who holds more
“The new government rules state that a maximum $1,000 can only be sold to travellers and students”
people only for disrupting the Iranian economy ... to stand against Iran’s prog- ress,” Tasnim News Agency reported.
Traders left without a rulebook
Despite the government’s interven-
tion to unify the official and unofficial exchange rates at the eleventh hour, most traders across the country trying to come to terms with the first day of the
dollars than this maximum must within a month either sell the money at the official rate or invest it in a US-denominated bank account in Iran. Buying and selling the dollar at higher prices than the official rate is now classed at the same level as smuggling contraband and anyone suspected of such transactions can be arrested and made subject to legal action.
Ferdowsi street in Tehran, which is famous for money exchange. Victor Jiang / Shutterstock.com
www.bne.eu