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Bank Melli Iran’s subsidiary in UK, Melli Bank Plc., has recently connected to Target 2, the European interbank payment network, said director of BMI’s Department for International and Foreign Exchange Affairs on Tuesday. “As a result, the bank is now able to offer services in euro to lenders in Iran,” Gholamreza Panahi was also quoted as saying by BMI’s website. Target 2 is an interbank payment system for the real-time processing of cross-border transfers throughout the European Union. BMI’s Hamburg branch is already linked to Target 2 interbank payment system. Persia International Bank and Bank Sepah’s branch in Frankfurt are the other two Iranian lenders in the European Union to have been connected to Target 2 after the lifting of western sanctions against Iran in January.

 

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Indian exporters have written to the Reserve Bank of India to expedite clearances for Iranian banks that have applied to open branches in India.

“We have asked the RBI to expedite clearance of the applications given by Iranian banks to open up branches. The Commerce Ministry is also supporting us. Once banks from both countries open their branches in the other country, bilateral trade will shoot up,” said Ajay Sahai, director general of FIEO, Hindubusinessline.com reported.

A delegation of business persons from Iran, representing a number of sectors such as textiles, clothing, fruits and vegetables, dates, live animals and bitumen, are in India to hold meetings with Indian businesses.

 “We believe that such business-to-business meetings will help increase trade between the two countries. We also hope that banks will get the relevant permissions soon to open branches,” said Ali Raoufi, deputy governor of Hormozgan Province who is leading the Iranian delegation.

Bank Pasargad, Saman Bank, Parsian Bank, Bank Mellat and Persia International Bank PLC have applied for setting up branches in India, some of which submitted their applications almost five years ago.

Sahai noted that the Commerce Ministry is also in talks with the Iranian government for allowing at least two Indian banks—SBI and UCO—to set up branches in Iran.

“IDBI could also apply for opening a branch in the country,” he said. Following the lifting of economic sanctions against Iran by the United Nations and several western countries and blocs, including the EU, the two countries are hoping that normalized relations would help boost business.

India’s exports to Iran that increased to $5 billion in 2014-15 fell to $2.8 billion the following year. Both sides are hopeful that bilateral trade will increase from the present $9 billion to $12 billion over the next two years.

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The current rate of the US dollar in the Iranian market varies greatly from the rate predicted in the annual budget and the discrepancy must be managed by the government, says the head of Majlis Economic Commission.

“We believe that the real rate of the dollar must be defined based on the mechanism of supply and demand in the economy and this means achieving unified currency rates,” Mohammad Reza Pour-Ebrahimi added in a talk with ISNA in reference to the rate set for the greenback in next year’s annual budget.

The government last week set the US dollar’s exchange rate at 29,997 rials in the 2016-17 proposed budget, which is expected to be approved by parliament in January. Last year’s rate was slightly lower at 29,850 rials.

The rate of the greenback in the new budget has been a hot topic of discussion among analysts in the wake of recent market volatility that saw the American currency gain considerably against the rial.

The greenback is currently trading in the Iranian unofficial market at a rate bordering on 40,000 rials while its official rate hovers around 32,000 rials.

“The approach put forth by the government must match the mechanism of supply and demand and rate unification in the economy, but unified rates have always been a matter of discussion but were never implemented,” Pour-Ebrahimi added.

The Central Bank of Iran and a number of top-level officials, including Economy Minister Ali Tayyebnia have repeatedly emphasized the necessity of unifying Iran’s dual exchange rates. While they have promised that the country will be able to enjoy the boons of a unified foreign exchange regime by the end of the current fiscal year in March 2017 time and again, a lack of tangible results has led some to believe the longstanding plan will not be implemented by that time.

The head of Majlis Economic Commission said the dollar rate adopted by the government in the budget is good from the standpoint of regulating the market, but it is a far cry from the current actual rate of close to 40,000 rials.

“It seems that the government must manage this 18-20% discrepancy between the rate of the dollar in the budget and its real rate,” he said. “This means either the government must balance market rates and bring them down to the 33,000 rials set in the budget or adopt the higher rate as its basis.”

The wiser approach, he said, would be to manage supply and demand in the market and “whatever the market says should be considered the main criterion”.

Pour-Ebrahimi noted that the Majlis commission cannot interfere with the issue, but the government’s policies can help improve the situation.       

 

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The Central Bank of Iran and a number of top-level officials, including Economy Minister Ali Tayyebnia have repeatedly emphasized the necessity of unifying Iran’s dual exchange rates. While they have promised that the country will be able to enjoy the boons of a unified foreign exchange regime by the end of the current fiscal year in March 2017!

come on baby make it happen...

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The media in New Delhi say the country is preparing to issue licenses to five Iranian private banks to open branches in India – a move which is expected to significantly facilitate trade between the two countries.  

The Times of India said in a report that the Federation of Indian Export Organizations (FIEO) had asked the Reserve Bank of India to issue the licenses for Bank Pasargad, Saman Bank, Parsian Bank, Sarmayeh Bank and Eghtesad Novin Bank.   

The banks had applied to open branches in India five years ago but the process had been delayed as a result of sanctions against Iran, the daily added on its website. 

At present, most of these banks conduct their transactions through UCO Bank, wrote The Times of India.

“However, with the lifting of the sanctions, this can be expedited as Tehran is keen to normalize banking and trade relations with India.”

The daily further quoted Ajay Sahai, the director general of the FIEO, as saying that the proceedings for opening branches for the five Iranian banks would be resolved within the next few weeks.  

On the same front, Iran’s media quoted officials speaking at an Iran-India trade forum in New Delhi as saying that the opening of branches by Iranian and Indian banks in each other’s territories would help facilitate the expansion of non-oil trade. 

The officials – as reported by Iran’s IRNA news agency – specifically warned that the lack of banks had already created problems for transferring money between the two countries, damaged trust between businesses from both sides and prepared the grounds for abuse by middlemen. 

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Iran expects to receive its first jet next month under a multibillion-dollar deal with Airbus for 100 planes, a senior Iranian official said.

Iran-Air-and-Airbus-deal-iran-news.jpg

Deputy Iranian Roads and Urban Development Minister Asghar Fakhrieh Kashan told Reuters in an interview that the negotiations with Airbus have been finalized and that the deal is expected the be signed on December 20 or 21.

The timetable suggests the first Airbus A321 could arrive before the January 20 inauguration of U.S. President-elect Donald Trump, who has opposed the nuclear deal reached last year between Tehran and six world powers that curbed Iran's controversial nuclear program in exchange for sanctions relief.

Airbus has said it was still negotiating the deal with Iran Air, the national airliner.

The deal comes after the U.S. Treasury Department in September granted permission to Boeing and Airbus to sell billions of dollars' worth of aircraft to Iran.

Kashan's comments about Airbus come one week after Iran Air announced it would buy 80 planes from Boeing over the next decade.

Based on reporting by Reuters

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The IMF announced in a statement that higher oil production and exports would be particularly instrumental in boosting Iran's economic growth that was in recession last year. 

"Higher oil production and exports, after implementation of the Joint Comprehensive Plan of Action (JCPOA) should allow real GDP growth to rebound to 6.6 percent in 2016/17," the Fund added in its statement.

"Growth is projected to ease to 3.5 percent in 2017/18 as oil production normalizes and non-oil sector growth remains modest."

On Saturday, Iran's Finance Minister Ali Tayyebniya said Iran's average economic growth for the current Calendar year had already exceeded expectations and reached above 5 percent. 

Tayyebniya added that Iran's growth had been specifically significant in sectors such as industries and agriculture. 

Other official figures show that the country's growth stood at around 1 percent during the last Persian calendar year (March 2015/16). 

The IMF further emphasized that it expects Iran's average inflation to stand at above 9 percent for the current Iranian calendar year that ends in March 2017. 

"The prudent policies implemented in recent years should allow inflation to average about 9 percent in 2016/17 before temporarily rising to just over 11 percent in 2017/18 due to the pass-through from recent exchange rate depreciation," the Fund announced in its statement released at the end of an annual evaluation of the Iranian economy. 

The IMF statement further added that Iran still needed to struggle to create the conditions for a sustained growth. 

"The challenge now is to create the conditions for sustained macroeconomic stability and growth," the Fund added.

"Comprehensive and coordinated reforms that seek to defend low and stable inflation, restructure and recapitalize banks, cast fiscal policy in a medium-term framework to support reforms, and prioritize legal and regulatory changes that facilitate investment, aid job creation, and improve governance would achieve these goals."

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TEHRAN, Dec. 20 (MNA) – A Bank Melli Iran (BMI) official said Melli Bank PLC, a BMI subsidiary, has been connected to the real-time gross settlement (RTGS) system for the Eurozone dubbed TARGET2.

Gholamreza Panahi, Member of the Board of Directors of Bank Melli Iran, said the connection enables speedy and final settlement of national and cross-border payments in the Eurozone.

He underlined that Melli Bank PLC, a wholly owned UK subsidiary of Bank Melli Iran, was ready to offer brokerage services to Iranian banks for euro payments in Europe.

The official recalled that TARGET2 is the RTGS system for the euro, offered by the Eurosystem and is used for the settlement of central bank operations, large-value euro interbank transfers as well as other euro payments; “it provides real-time processing, settlement in central bank money and immediate finality.”

The connection to the payment system used in the European System of Central Banks (ESCB) marks an achievement of the Joint Comprehensive Plan of Action (JCPOA) and Persia International Bank PLC had also previously joined TARGET2 through central bank of Germany.

Additionally, Frankfurt branch of Iran's Bank Sepah has also managed to make payment transactions in TARGET2 in the ear emerged after JCPOA.

All in all, foreign branches of Iranian banks, following JCPOA implementation, have launched extensive plans to return to cross-border payments though they require to upgrade their information and systems in the first place.

 

HA/IRN82353849

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 ID: 3855957 - Wed 21 December 2016 - 11:59
TEHRAN, Dec. 21 (MNA) – Iranian MP, while pointing to existence of numerous venues for development of Tehran-Prague relations, called for removal of ongoing barriers.

Head of Iran-Czech Parliamentary Friendship Group Mehdi Farshadan made the remarks on Tuesday at a meeting with Ambassador of Czech Republic to Tehran Svatopluk Čumba.

Farshadian referred to the upward trend in expansion of bilateral ties between the two countries adding “parliamentary friendship groups play an influential role in facilitating collaborations in various arenas.

Given huge economic and commercial potential in both countries, he said the Iranian Majlis supports joint investment projects in various industrial sectors.

The official further emphasized the need for banking relations saying “banking collaborations mark the primary means of boosting economic ties and encourage commercial transactions between the two states.

He urged Iranian and Czech officials to spare no effort in reinvigoration and strengthening of cooperation.

Also at the meeting, Czech’s Čumba, voiced optimism towards exchange of several commercial, economic and political delegations between the two parties as a way of bolstering bilateral relations and cooperation.

He went on to underline that his country welcomes cooperation with Iran in numerous fields including renewable energies, recycling, management of water resources, agriculture and auto manufacturing industry.

Čumba also touched upon facilitation of visa issuance since it could lead to better understanding between Iran and Czech Republic reiterating that the European country welcomed expansion of relations with the Islamic Republic of Iran.

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Malaysian PETRONAS rivals Total, Shell in Iran

نفت گاز پتروناس
News ID: 3854762 - Tue 20 December 2016 - 10:09
TEHRAN, Dec. 20 (MNA) – NIOC and Malaysia’s PETRONAS (Petroliam Nasional Berhad) will ink an MoU this week on development of Cheshmeh Khosh and South Azadegan oilfields.

Following the inking of Memoranda of Understanding (MoUs) for conducting developmental studies in Azadegan oil field with France’s Total, Britain’s Royal Dutch Shell and Inpex Corporation of Japan, a cooperation agreement will be also inked in the current week between the largest Malaysian oil firm PETRONAS and the National Iranian Oil Company (NIOC) to carry out similar studies in Iran’s joint oil field with Iraq.

Moreover, NIOC will also sign into another deal with the Malaysian side in order to perform studies for boosting recovery factor in Cheshmeh Khosh field.

In recent months, NIOC has sealed several MoUs with Austria’s OMV and Gazprom of Russia aiming to increase recovery factor of Cheshmeh Khosh in the west of Iran.

The accord between NIOC and PETRONAS is scheduled to be signed on Wednesday in Tehran between officials of the two oil companies.

On the sidelines of his meeting with Minister of Foreign Trade and Industry of Malaysia Dato’ Seri Mustafa Muhammad, Iranian Oil Minister Bijan Zanganeh said Iran welcomes arrival of Malaysian firms, Petronas in particular, since they hold a long history of relations with the country’s oil industry.

Prior to sanction years, the bulk of cooperation between National Iranian Oil Company (NIOC) and Malaysia pertained to sales and exports of crude oil as Iran was deploying a daily average of 50 to 60 thousand barrels of crude oil to Malaysia’s PETRONAS under spot contracts, he continued.

One of NIOC’s most significant deals with Petronas was over the developmental project of South Pars Phase 11 which was supposed to be accomplished in collaboration with France’s Total and Repsol S.A. of Spain though the agreement was violated as a result of international sanctions against Iran.

Despite having had only a few years of activity in the oil and gas industry, PETRONAS remains among rare oil and gas companies who enjoy functionality and operational teams in both upstream and downstream oil sectors.

The Malaysian oil and gas company is currently active in numerous fields including oil and gas refining, construction of pipelines, LNG transfer, gasoline stations management, manufacturing and marketing of petrochemicals and chemicals, exploration, exploitation, drilling, production and storage of crude oil, petroleum products and natural gas.

HA/3854303

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TEHRAN, Dec. 19 (MNA) – Indonesia Eximbank CEO announced that his institution will begin direct banking cooperation with Iran in near future.

Ngalim Sawega made the remarks on the sidelines of a joint trade conference between Iran and Indonesia adding “Iran’s monetary transactions are currently being carried out through a third-party country, a fact which makes the process costly and time-consuming.”

The official however noted that direct banking cooperation will soon begin between the two sides.

Sawega said his bank is ready to resume banking interactions with Iran within the framework of mutual agreement between Indonesia Eximbank and Export Development Bank of Iran (EDBI) in a bid to further develop trade ties between the two states.

On earlier ties with EDBI, the official underlined that the Indonesian bank had annual meetings with senior officials of the Iranian institution given that EDBI was an observer member of Asian EXIM Banks Forum (AEBF).

Sawega referred to the fight against terrorism and money laundering as the moves which will facilitate banking relations.

On the possible impact of the policies of the US President-elect Donald Trump on banking ties with Iran, the official said they will not affect relations with Iran as long as those ties are under the regulations.

He went on to maintain that his Indonesia Eximbank, in the first place, is willing to offer financial support for exports of goods to Iran.

Iran-Indonesia trade conference was held last week in Tehran with presence of heads of Iranian and Indonesian chambers of commerce, 46 representatives of Indonesian companies as well as Iran’s private sector activists.

A total of five cooperation agreements were inked between Tehran and Jakarta for reinvigoration banking and stocks relations, paper purchase, crude oil sales and imports of foodstuff.

During the first seven months of the Iranian calendar year (began March 20, 2016), Iran exported different products to Indonesia about 73.717 million dollars and in the meantime imported products worth around 82.908 million dollars.

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Ngalim Sawega made the remarks on the sidelines of a joint trade conference between Iran and Indonesia adding “Iran’s monetary transactions are currently being carried out through a third-party country, a fact which makes the process costly and time-consuming.”

The official however noted that direct banking cooperation will soon begin between the two sides.

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Islamic finance set for big lift from Iran 

Wed Dec 21, 2016 9:7AM
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  2. Iran
  3. Economy
Islamic finance is a thriving industry based on Shariah-compliant banking.
Islamic finance is a thriving industry based on Shariah-compliant banking.

The Islamic finance industry is expected to get a significant lease of life from the opening of Iran’s economy which has assets of around $448 billion to its name.

The Iranian banking system has yet to fully hook up with the global financial system as well as important Islamic finance institutions, especially those in Southeast Asia.

Iran is about to assume chairmanship of the Islamic Financial Services Board (IFSB) for the year 2017, adding a fresh weight to its status as one of the largest players in terms of assets in Shariah-compliant banking.

Last Wednesday, the Kuala Lumpur-based IFSB said it had appointed the Central Bank of Iran Governor Valiollah Seif as its chairman effective from Jan. 1.

The appointment is a major boost to Iran’s bid to reintegrate into the international finance system after years of seclusion because of US-led sanctions. It could also help Iran fine-tune its finance practices with those in other Islamic financial centers across Asia and the Middle East.

For more than three decades, Iran's entire banking system has followed Islamic principles, which includes 34 Islamic banks with assets of about $450 billion, putting the country on par with the likes of Saudi Arabia and ahead of Malaysia.  

575fbd60-f938-4295-b4e9-090ce45b1089.jpg A view of Tehran from Tohid Tunnel, with the Milad Tower and snow-capped Alborz mountains in the background 

Chairman of Iran Banking Institute Mehdi Razavi even puts Iran’s banking assets at no less than $518 billion, which would make the country the biggest Islamic financial asset holder in the world, according to Doha-based Gulf Times newspaper.

This represents around a third of total assets attributable to Islamic banking globally estimated at $1.5 trillion.  

The IFSB sets the standards for Islamic finance and offers guidelines on better governance, capital adequacy and liquidity risk management, among others.

Seif’s first step in office in the IFSB is expected to be pushing forward the adjustment of new sukuk products, which are currently in development by Iran’s Securities and Exchange Organization, towards international Islamic finance standards.

Iran's version of Islamic finance slightly differs with what is observed in other Muslim countries. For instance, the payment of interest is banned in Islamic finance around the world but Iranian banks charge a profit rate that is periodically set by the central bank as a way of curbing inflation.

By aligning its finance practices, observers expect “the dawn of a new era” for Iran’s Islamic banks and the move is expected to positively affect myriad sectors.

7fd3f877-bc0e-45c4-a1c2-b5c030ca2de4.jpg Pedestrians pass a Bank Melli Iran branch in Tehran, Aug. 22, 2015. (Photo by Getty Images)

For example, an opening of Islamic finance industry in Iran would likely unleash a flood of sukuk issued by Iranian companies from manufacturing to hospitality, transport and other core industries.

It could also bring state organizations on board about funding infrastructure development programs and power plants and providing much-needed investments in the petrochemical sector.

The way, however, is not without challenges. Beside bringing its version of Islamic banking in line with established standards of other Shariah-banking jurisdictions, Iran has to implement a better system of checks and balances in its banks.

 In recent years, banks and financial institutions have mushroomed in Iran, engaging more in speculative activities than finance.

According to the Central Bank of Iran, the financial sector has about $260 billion of liquidity. This figure equals 65% of the GDP of Iran’s economy. Normally, the cash flow is not a bad thing but it becomes a burden when it trickles into the non-productive sector, leading to stagflation.  

Economists say what the government needs to do now is to channel financial resources to production from the speculative market.

Iran’s integration, they say, could both help put the country’s financial boat back on an even keel and enormously boost Islamic finance industry even if the process of aligning the different approaches may take years.

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  1. Economy
  2. Domestic Economy
Wednesday, December 21, 2016

25% Rise in Tax Revenues

 

The government’s tax revenues have grown by 25% in the first eight months of the current Iranian year (started March 20) compared with last year’s corresponding period, the head of National Tax Administration said. However, Kamel Taqavinejad did not specify how much the administration earned over the period. In the budget bill submitted to parliament earlier this month, the government is projecting that taxes will rise to 1,130 trillion rials ($28.6 billion at market exchange rate) for the upcoming fiscal year, up from this year’s estimated 1,010 trillion rials ($25.6 billion).

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For more than three decades, Iran's entire banking system has followed Islamic principles, which includes 34 Islamic banks with assets of about $450 billion, putting the country on par with the likes of Saudi Arabia and ahead of Malaysia.

I like this part

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The US dollar broke the 40,000-rial threshold in Tehran's market on Wednesday, recording an all-time high for the currency.

While the American currency had begun to rally in November, the 40,000-rial threshold had been considered impenetrable by economic officials.

The currency was sold for 40,200 rials at the close of trade on Wednesday, according to the website of the Association of Bureaux de Change Operators of Iran.

A survey by Financial Tribune indicated, however, that the greenback changed hands for 40,300 rials in exchangers located in Tehran’s Ferdowsi Street–the currency market's hub.

Kamal Seyyed Ali, the head of Export Guarantee Fund of Iran and Central Bank of Iran’s former deputy for foreign exchange affairs, believes that the recent surge in forex rates–notably the US dollar–is fueled by market speculation and not real.

“Higher forex rates are needed for reducing imports and boosting exports. However, any surge in forex rates should take place with the central bank's direction,” he was quoted as saying by Eximnews.

The official noted that the central bank’s interference in forex markets is only for managing the market, dismissing recent allegations that CBI had intentionally raised forex rates to plug the government's budget holes.

“Central bankers are fully aware of higher forex rates’ impact on the country’s economy,” he said.

While the government and the central bank have come under fire for recent currency market swings, officials have sought to allay fears by saying that these fluctuations are only temporary and will abate as demand for the currency subsides.

 Masoud Khansari, the head of Tehran Chamber of Commerce, Industries, Mines and Agriculture, recently expressed concern about the government's policy to keep foreign exchange rates low, saying that was to blame for sudden market volatility in times of upheaval.

“The next concern is that the government tries to insist on lowering currency rates again and moves to inject cheap dollar into the market,” Khansari said on Tuesday.

Khansari said the previous administration eventually failed and in doing so, triggered a massive hike in currency rates.

Back in December, the governor of Central Bank of Iran, Valiollah Seif, said the forex rally is temporary and will by the end of the current fiscal year that ends next March, which is aimed at assuaging concerns about the recent surprise rally in currency markets.  

Seif also rejected that the government is in favor of increasing forex rates to make up for the budget deficit.

The central bank chief concluded by saying that the pattern of change in the market in the past three years has shown that foreign exchange rates "move on a downward trajectory during the final months of the year".

Causes

Seyyed Ali believes the US dollars’ growth in international markets and Donald Trump’s victory in the US presidential election has had the highest impact on forex rates in Iran.

“The OPEC's deal [to cut production levels] resulted in a slowdown in the forex rates' rally, but the impact did not last for more than a week,” he said.

"Allocating subsidized dollars for importing a larger volume of goods also contributed to the growth of forex rates in recent years."

Referring to the stability of foreign exchange rates in recent years, Seyyed Ali said, “The drop in inflation rate, oil price recovery and growth in the country’s non-oil exports were key factors that helped keep forex rates stable.”

Seyyed Ali also discussed the government’s decision to set the US dollar’s rate at 33,000 rials in the next budget and said “the budget plan does not force CBI to sell its forex resources at 33,000 rials, but rather it marks the lowest possible rate for the currency”.

“We cannot expect the dollar to be exchanged for lower than 37,000 rials,” he said, stressing that the government should have set the US dollar's rate in the 2017-18 budget higher.

 

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Iran President calls for full restoration of banking ties with Armenia

Yerevan, Dec 21, IRNA – President Hassan Rouhani on Wednesday called for full restoration of banking ties with Armenia to enhance level of trade and economic cooperation.

 
82356055-71266717.jpg

He made the remarks in closing ceremony of Conference on Iran-Armenia Trade ties in Yerevan.

Iranian and Armenian entrepreneurs should get acquainted with capacities of the two countries for trade and economic cooperation and utilize them to the benefit of the both nations, Rouhani said.

President Rouhani said that officials of Iran and Armenia should prepare grounds for development of cooperation and removal of the obstacles on the way of expansion of ties.

He said that cancellation of visa between Iran and Armenia is an important step to expand tourism, cultural and academic relations.

Regarding the efforts to develop Iran's gas export to Armenia, President Rouhani emphasized the need to regulate the banking ties.

Considering necessity to facilitate financial and credit exchanges as well as the customs house services for businessmen and private sector, Rouhani said that using Aras Free Zone may facilitate trade relations between the two states.

Regarding geographical position of Iran and Armenia, Rouhani said that the two countries may turn to a transit corridor between north and south.

He said that connection between Black Sea and the Persian Gulf would create big developments in trade and economic relations between the two countries as well as regional states.

Concerning preferential trade between the two countries as well as Iran and Eurasia big steps should be taken, Rouhani said.

He called for positive steps to be taken by the two governments to speed up cooperation on economy, science and technology in future.

Armenian President Serzh Sargsyan said in the conference that Armenia will increase level of guarantee for Iranian businessmen and expressed his country's interest to connect the Black Sea to the Persian Gulf through Iran and Armenia and expressed hope that the two countries would promptly reach free trade agreement.

Sargsyan also expressed his country interest to launch direct flight between Tehran and Yerevan.
1391**1416

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Malaysia's Petronas to Study 2 Iranian Oil Fields 

News ID: 1274454 Service: Economy 
 December, 21, 2016 - 17:45 
پتروناس

TEHRAN (Tasnim) – The National Iranian Oil Company (NIOC) has signed a memorandum of understanding (MoU) with Malaysia's oil and gas company, Petronas, over the development of two major oil fields. 

The MoU was signed between the two sides during a Wednesday ceremony in Tehran attended by Gholamreza Manouchehri, the deputy for engineering and development affairs of the NIOC, and Muhammmad Anwar Bin Tayib, a senior official with Petronas.

According to the document, Petronas would be required to carry out studies on the development of the South Azadegan oil field, located in the southwestern province of Khouzestan, as well as Cheshme Khosh oil field in the western province of Ilam.

Iran has also awarded the development of the two oil fields to Russia’s Gazprom, the Royal Dutch Shell and French oil and gas firm Total. Therefore, Petronas needs to compete with Gazprom for Cheshme Khosh as well as Shell and Total over the development of South Azadegan.

Iran shares South Azadegan with Iraq which has been producing 210,000 barrels per day from the field since April 2014. Iraq is targeting a production plateau of 1.8 million bpd from the field.

Cheshmeh Khosh was discovered in 1975 but is yet to start production. Its projected production target is 18,000 barrels per day (bpd) and 115 million cubic feet per day (mcf/d) of natural gas.

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The Export Development Bank of Iran has rekindled its dealings with 90 international banks after the country reached a nuclear accord with world powers last year, announced the bank’s chief executive.

“After the nuclear deal was struck, we opened accounts with 23 banks and can now do business with 90 banks in 65 countries directly or indirectly,” Ali Salehabadi said in an interview with IBENA.

“The establishment of correspondent relationships will mean that LCs [letters of credit] issued by the Iranian side will be accepted and vice-versa.”

The EDBI chief noted that his bank has now ties with 20 European, 17 Asian and four African countries, of which Turkey, Belgium, Germany, Switzerland, Italy, Spain, Austria, India, South Korea, Japan and China are the most notable.

On goals set out to be achieved by the end of the current fiscal year in March, he said EDBI plans to develop its correspondent ties and establish contact with exim banks of countries such as Turkey, South Korea and Hungary to receive credit lines.

“Since receiving credit lines from other countries is done for the purpose of importing goods, we have only provided credit lines to other countries since the beginning of the year,” he added.

Salehabadi noted that in exports, the bank has so far allocated credit lines to Russia, Armenia and Iraq. He says the credit line to Armenia was worth $83 million and “$200 million were paid to Iranian technical and engineering services contractors in Iraq”.

The head of government-owned bank asked Iranian exporters to introduce credible banks they work with in different countries to EDBI for establishing contact with them and providing exporters with credit lines through those banks.

“This proposition works in the way that exporters receive the final cost of the goods from EDBI that will receive the money from a verified bank in the target country over two years,” he said.

“This kind of deal can be branded as buyer’s credit with the difference that exporters receive their money directly and in cash from EDBI and the interest will be collected from the buyer.”

A buyer’s credit is a loan facility extended to an importer by a bank or financial institution to finance the purchase of capital goods or services and other big-ticket items.

Salehabadi concluded by saying that financing is a way of developing exports and that is why the National Development Fund of Iran has considered a $1 million deposit in banks solely to strengthen  exports.

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ith the impending implementation of the plan to switch the Iranian monetary unit from rial to toman, the Central Bank of Iran may issue banknotes with higher denominations, the chief executive of a major private bank said.

“The change in the monetary unit has been in the making for a long time  and is still ongoing,” Hadi Akhlaqi, CEO of Bank Mellat, said in reference to the government’s recent decision to approve changing Iran’s monetary unit from rial to toman, which will lop off one zero from the current national currency.

The decision was made when ratifying the Central Bank of Iran’s bill during a Cabinet meeting in early December and awaits parliamentary approval.

“People usually use toman in their dealings and rial is practically eliminated, therefore the advent of toman has already occurred and now the government only seeks to make it official,” Akhlaqi was quoted as saying by IBENA, a news website close to CBI.  

While rial has been used as Iran’s monetary unit in official documents and budget statements, toman was being used more commonly in daily transactions by citizens, as growing inflation over the decades had made the use of rial inconvenient.

Officials have insisted that the proposed shift to toman should not be considered currency revaluation, as it is set to help ease money transactions for the public and respect societal norms.  

On the potential repercussions of a currency switch for the Iranian economy, the bank chief assured that the measure will be implemented in a way to have the least impact on economic stability. He added that the new notes must be issued gradually and “the costs will not be significant”.

“The change in the monetary unit paves the way for the issuance of banknotes with higher denominations. The central bank has been looking to issue larger denomination banknotes and as far as I know, the new and big denomination bills have already been designed,” he said.

  Currency Revaluation

Akhlaqi pointed out that the currency change proposal has seemingly had no significant impact on the country’s monetary variables, but it may exert a psychological effect that will not be negative.

The chief executive voiced support for proposals calling for the monetary switch alongside a proper currency revaluation.

This, he says, will reduce costs and save the people the hassle of dealing with multiple changes.

“I believe in this because the monetary unit change will entail costs for the country and if we are to have currency revaluation, it can be done at the same time as the monetary unit change,” he said.

Noting that the monetary change will see one zero dropped from the national currency, Akhlaqi added that the possible ensuing revaluation will lop off more zeroes, but a decision must be made regarding the exact number of zeroes that could be removed.

In recent years, many officials and pundits have stressed the benefits of dropping three to four zeroes from the Iranian currency. 

Opinion piece!....but I like it...

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  1. Economy
  2. Business And Markets
Thursday, December 22, 2016

Bank Lending Up 48%

 
 
 

The banking sector lent 3.26 quadrillion rials ($82.7 billion) to 5.3 million applicants during the eight months ending Nov. 20, marking a 48.4% growth compared with the same period of last year, the Central Bank of Iran’s data show. Almost 65% of the loans were paid to businesses for meeting their need for working capital, whereas startup business loans accounted for 9% of the extended capital during the eight-month period. About 2.7 million businesses active in the services sector received 1.32 quadrillion rials ($40.8 billion), which are higher than those extended to other sectors. Loans for industrial and mining sector amounted to 928.4 trillion rials ($23.5 billion) during the period. The amount was paid to 203,185 industrial units. Working capital loans accounted for 84% of the total money doled out to the industrial and mining s

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Iran President calls for full restoration of banking ties with Armenia

Yerevan, Dec 21, IRNA – President Hassan Rouhani on Wednesday called for full restoration of banking ties with Armenia to enhance level of trade and economic cooperation.

 
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He made the remarks in closing ceremony of Conference on Iran-Armenia Trade ties in Yerevan.

Iranian and Armenian entrepreneurs should get acquainted with capacities of the two countries for trade and economic cooperation and utilize them to the benefit of the both nations, Rouhani said.

President Rouhani said that officials of Iran and Armenia should prepare grounds for development of cooperation and removal of the obstacles on the way of expansion of ties.

He said that cancellation of visa between Iran and Armenia is an important step to expand tourism, cultural and academic relations.

Regarding the efforts to develop Iran's gas export to Armenia, President Rouhani emphasized the need to regulate the banking ties.

Considering necessity to facilitate financial and credit exchanges as well as the customs house services for businessmen and private sector, Rouhani said that using Aras Free Zone may facilitate trade relations between the two states.

Regarding geographical position of Iran and Armenia, Rouhani said that the two countries may turn to a transit corridor between north and south.

He said that connection between Black Sea and the Persian Gulf would create big developments in trade and economic relations between the two countries as well as regional states.

Concerning preferential trade between the two countries as well as Iran and Eurasia big steps should be taken, Rouhani said.

He called for positive steps to be taken by the two governments to speed up cooperation on economy, science and technology in future.

Armenian President Serzh Sargsyan said in the conference that Armenia will increase level of guarantee for Iranian businessmen and expressed his country's interest to connect the Black Sea to the Persian Gulf through Iran and Armenia and expressed hope that the two countries would promptly reach free trade agreement.

Sargsyan also expressed his country interest to launch direct flight between Tehran and Yerevan.
1391**1416

 

 
 
Contact Editor-in-chief: mail32.png newsroom@irna.ir 
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