Page 34 - IRANRptNov18

Iran’s central bank authorised to make attempt at shoring up collapsing rial
accounts and UAE dirham accounts are 3 and 2%, respectively.
The CBI said the offered rates scheme had brought an extra $10mn into accounts at the country’s banks.
Meanwhile, as of mid-September, the government resumed providing one-time FX allowances for Iranian nationals travelling abroad.
Iranians travelling to neighbouring and CIS region countries (except Iraq) are entitled to €500 or its equivalent once a year at the applicable secondary market exchange rate. That provides them with a substantial saving on the unofficial market rate. Those Iranians travelling further afield have the right to receive €1,000 or its equivalent at the secondary market rate for the given hard currency.
The Central Bank of Iran (CBI) has been authorised by the Rouhani administration and the parliamentary and judiciary chiefs to shore up the collapsing Iranian rial (IRR), following the all-time low the currency recorded against the dollar last week.
On September 26, with relations between Tehran and Washington souring even further following combative speeches at the UN General Assembly i n New York, the IRR sank to 190,000 versus the USD, its weakest ever rate. That put its year-to-date loss against the world’s primary reserve currency at 77.4%. However, by the day of the announcement giving the CBI room to act, it had trimmed losses to 175,000.
Following the return of President Hassan Rouhani to Tehran after his UN General Assembly appearance, officials “gave the central bank governor the necessary authority to intervene in the foreign exchange market and to manage it”, Islamic Republic of Iran Broadcasting (IRIB) reported late on September 29.
However, Abdolnasser Hemmati, who became the CBI governor in late July , has previously said that he was not minded to react to the devaluation of the rial and would instead allow market forces to play out. Whether the unprecedented scale of the rial’s collapse—largely caused by Washington’s sanctions-driven attempt to cripple Iran’s economy to force the country into talks on its role in Middle East affairs—brings about a change of mind remains to be seen.
8.3 Stock market
Oil smuggling prospect opens up as Iran reactivates crude bourse
Iran is reopening its domestic crude oil exchange in preparation for a first attempted sale—of 1mn barrels—on October 22.
The bourse was last used four years ago with limited success when US sanctions were employed to try to block Iranian oil exports—as they will be once more from November 5 as the Trump administration attempts to throttle Iran’s economy to force Tehran to renegotiate its role in Middle East affairs. The bourse will not be able to bring a boost to Iran’s oil sales that is seen as legitimate in Washington’s eyes as any international buyers will still be subject to US secondary sanctions for dealing with Iranian entities, but any barrels sold via the exchange could allow smugglers to take oil out of Iran. From that point they could launder it into the global market, Iman Nasseri, Middle East managing director for consultancy FGE Energy, told S&P Global Platts on October 10.
34 IRAN Country Report November 2018 www.intellinews.com