Page 28 - IRANRptFeb19

Central bank interventions caused Iranian rial’s remarkable turnaround says regulator’s governor
‘resistance economy’ including reducing our reliance on oil revenues and increasing our dependence on domestic potentials and non-oil exports,” Hemmati was quoted as saying by Mehr.
It also cited him as saying that inflation was “now under our control” despite the ongoing US pressure on the system. Annual inflation in Iran stands at just slightly short of 40% but the monthly rises appear to be slowing.
Iranians must change their spending habits and “take seriously” persistent efforts by the US to destabilise the economy, Hemmati also told state television. The country faced having to confront “very high” levels of corruption that are exacerbated by exploitative currency trading practices, he added in the interview.
The IRR is weaker by around 60% against the USD compared to February of last year. For the past month, the dollar has been trading at between IRR110,000-120,000 on the open market. At its weakest point last year it was plunging towards the IRR200,000 mark.
Hemmati, appointed as the currency collapse grew critical last year, has systematically removed many policies of his predecessor. He has brought much of the free currency exchange market under his personal supervision in a bid to calm rampant inflation and wild speculation. Officials have intimidated currency profiteers into staying out of the market by pointing to special courts they can be brought before. The courts were set up to deal with opportunists who criminally exploit market turmoil brought about by the sanctions.
Hemmati has insisted that the CBI is now in full control of free market currency rates in Iran following market interventions it made late in the year. The prospect and advent of the US sanctions pulverised the IRR in 2018, but towards the end of the year it made a remarkable half-recovery as the Iranian central bank made interventions and the markets realised Donald Trump’s plan to strangle Iran’s economy was not yet in top gear .
By providing and facilitating the supply of banknotes and remittances to market participants and gradually opening financial channels with OECD countries and the European Union, the CBI would create the necessary market stability to hit its targets for the value of the IRR, Hemmati said.
7.1 Forex rate platform
Iran zeroes in on plan to remove four zeroes from rial
The Central Bank of Iran (CBI) has tabled a motion to remove four zeros from the country’s currency, its governor has said in a memo, Tasnim News Agency reported on January 6.
Iranian officials previously discussed removing at least three zeroes from Iranian rial (IRR) sums as far back as the Ahmadinejad administration which ended in 2013, but the currency reform plan has repeatedly been put on the back-burner due to the scale of the undertaking and the cost to the economy, including further worries centred on inflation.
In a statement on the CBI website on January 6, the regulator’s governor Abdolnasser Hemmati said a bill to take off the four zeroes had been proposed to the parliament. At the market close on January 6, the rial on the free market
28 IRAN Country Report February 2019 www.intellinews.com