Page 28 - bne IntelliNews Country Report: Iran Dec17

6.2.1 Private local debt dynamics
The Central Bank of Iran (CBI) has raised the ceilings of privately held debt allowed to individuals and corporate entity owners who wish to leave the country, Banker.ir reported on January 31.
The limits have been raised to IRR3bn ($75,000) for individuals and IRR5bn ($125,000) for owners of corporate entities. The exit ban linked to private debt has been in place since 2013. The debt ceilings were previously set at IRR2bn ($50,000) for both categories.
The lifting of the ceilings follows the devaluation in real terms of the Iranian rial. Its value has sunk three times against the US Dollar since 2013.
Iran has strict rules for debtors. When a person or enterprise takes a loan, collateral against the value of the original loan must be put up. Failure to repay a loan means a possible prison sentence and a place on the no-fly list.
The CBI’s new directive comes after several months of lobbying by business groups in the country who have cited weak economic growth and economic sanctions as the main reasons why people are falling into arrears.
7.0 FX
Iran - FX
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Currency (units per EUR) (eop)
34,178
34,092
35,339
34,056
34,859
37,057
39,666
Currency (units per USD) (eop)
30,260
30,700
31,460
32,375
32,422
32,489
33,805
Iran pushing for de-dollarisation in foreign trade after Turkey breakthrough
Iran’s First Vice-President Eshaq Jahangiri has said the country is moving towards removing the dollar from foreign transactions, with a deal already struck with Turkey to that end, Tasnim News Agency reported on October 22.
This is not the first time the Islamic Republic has started to look at its options when it comes to ridding itself of the petrodollar. Previous administrations have had the same mantra. However, with the US steadfast in refusing to wave through the use of the greenback in foreign trade and investment transactions with Iranian entities, Iran has managed to clinch several notable deals in euros, the yuan, rupee and ruble since the nuclear deal was signed in November 2015.
“At the current stage, we insist on using official currencies other than the US dollar, like the euro, in international transactions,” Jahangiri said, addressing an event called National Day of Exports in Tehran.
Jahangiri said Iran was seeking to exclude the dollar while arranging any deal with counterparties in foreign countries. He noted that Iran and Turkey—which in early October agreed that they would attempt to more than triple bilateral trade to more than $30bn annually —had lately agreed to trade in their own currencies in future deals.
Last week, the Governor of the Central Bank of Iran (CBI) and his Turkish
28 IRAN Country Report November 2017 www.intellinews.com