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Iranian Rial


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President Hassan Rouhani has signaled the end of electronic fuel cards, government spokesman said on Tuesday, drawing to a close a disputed system introduced nearly a decade ago by former president Mahmoud Ahmadinejad for rationing subsidized gasoline and diesel.

"Scrapping the fuel cards was part of the amendments to Iran's budget ( 2016-17) and the president has given the go-ahead" to invalidate the fuel cards which the government says has lost its purpose, Mohammad Bagher Nobakht said, Shana reported.

He added that the parliament had assigned the government with making the  final decision on the fate of the fuel cards that were given to all motorists, cabbies and heavy and light vehicle owners.

Comments by Nobakht put to rest months of public wrangling between the government and the political opponents of the president and his administration over the fate of the fuel cards.

In April, a group of conservative-leaning lawmakers passed a law as part of the state budget that mandated the government to introduce two prices for gasoline; a base price for subsidized gasoline and a higher price that would be used after consumption hit a certain ceiling.

The legislation was seen as a setback for the Rouhani administration, which had eliminated the quota system in May 2015. Gasoline since then is available at a single price for all consumers.

A budget amendment in August revoked the two-tier pricing scheme but  left the door open for discarding the fuel rationing system once and for all.

In that month Mehdi Mofatteh, the rapporteur of Majlis Energy Commission, claimed the government had no plans to abandon the fuel cards.

Respected analysts and economic experts have long been against the fuel cards, underlining the system as unwanted and a source of corruption.

Oil Minister Bijan Namdar Zanganeh has made the logical argument that the fuel cards are indeed irrelevant when gasoline is sold at a single price without limitations, stressing that there was no meaningful use in collecting data via the cards.

The fuel card launch in 2007 was trumpeted as a means of curbing consumption, adjusting prices and eliminating fuel smuggling rampant before the rationing system was introduced.

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  1. Economy
  2. Business And Markets
Wednesday, October 05, 2016

Single Currency Rate in 2017-18 Budget

 
 
 

Iran’s national budget for 2017-18 will be prepared based on unified exchange rates, Masoud Nili, President Hassan Rouhani’s economic advisor said on Tuesday.

“Plans to unify foreign exchange rates are moving ahead. A flexible forex regime is needed, which hopefully will be implemented by the end of the current fiscal year in March 2017,” he was quoted as saying by the khabaronline.ir website, during a meeting with the presiding board of Tehran Chamber of Commerce, Industries and Mines and Agriculture.

Unification of forex rates is considered a crucial requirement for the reintegration of Iran into the global banking system and payment networks. Iran was forced to revert to the controversial double exchange rate regime after nuclear-related sanctions unleashed turmoil in the forex market in 2011-12 in which the national currency lost almost 70% of its value within days.

The Central Bank of Iran has already started plans for launching a single foreign exchange rate regime.

The CBI also has an eye on reducing fluctuations in the foreign exchange market. It has also been working to bring the two rates closer, mainly through lifting the official exchange rates in the past few months.

In a related move, the CBI allowed banks to trade foreign currencies at the market rates. Lenders were also given the permission to attract deposits in hard currency.

Nili noted that Iran experienced 4.4% economic growth during the first quarter of the fiscal year (ending in June 20).

“Stagnation is no longer the main problem of the economy,” he said. “Currently we need to focus on accelerating economic growth as the main challenge confronting the economy.”

“By recognizing growth as the main issue in Iran’s economy, we will direct the government toward taking fundamental measures,” he added. Iran's economy was grappling with chronic negative growth 

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Reyl Bank has announced that it is opening bank accounts for Iranian individuals and companies through its branches in Geneva and Dubai, allowing accountholders to transfer money, said Sharif Nezam Mafi, head of Iran-Switzerland Chamber of Commerce on Tuesday. “Reyl is not a large bank, but the move is a starting point for further cooperation between Iran and Switzerland,” he was quoted as saying by Tehran Chamber of Commerce, Industries and Mining’s website. Founded in 1973, Reyl & Cie Ltd is licensed as a bank in Switzerland and performs its activities under the direct control of the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB). The bank is also licensed to operate in the UK, Luxembourg, Singapore, US and Dubai.

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"Plans to unify foreign exchange rates are moving ahead. A flexible forex regime is needed, which hopefully will be implemented by the end of the current fiscal year in March 2017,” he was quoted as saying by the khabaronline.ir website, during a meeting with the presiding board of Tehran Chamber of Commerce, Industries and Mines and Agriculture.

Unification of forex rates is considered a crucial requirement for the reintegration of Iran into the global banking system and payment networks. Iran was forced to revert to the controversial double exchange rate regime after nuclear-related sanctions unleashed turmoil in the forex market in 2011-12 in which the national currency lost almost 70% of its value within days.

The Central Bank of Iran has already started plans for launching a single foreign exchange rate regime."

Just saying while I'm sober, this will be a huge let down for all if this thing doesn't pop by March 20th 2017 as they have been saying for a long while....I'll be crawling back under a rock with my whiskey bottle all alone........I'm just mentally venting<_<......keeping the faith!! :praying:

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Lol....I am keeping the faith for October! They have said "october", "by March" and now " before March" I prefer the october and in their words currency with " real worth"

i like this part Unification of forex rates is considered a crucial requirement for the reintegration of Iran into the global banking system and payment networks.

Edited by screwball
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The dual forex rate regime will come to an end within "the next two or three months", said the minister of economy in what is seen as the most definitive announcement by a top official about the oft-mentioned plan to adopt floating exchange rates.  

"A multi-rate currency system has many downsides and creates the groundwork for corruption and that (among other things) is why forex rates will be unified within the next two or three months," Ali Tayyebnia was quoted as saying by banker.ir on Wednesday.

Leading economists and business leaders have often complained about the double currency rates. Foreign investors and companies are also of the strong opinion that in the present forex climate working with and in Iran is a gargantuan task if not outright impossible.

Pointing to government measures that have reduced the discrepancy between the official and unofficial (open market) exchange rates, he noted that in the past, the difference between the two rates was too big resulting in corruption and venality.

Iran was forced to revert to the controversial dual exchange rate regime after nuclear-related sanctions unleashed turmoil in the forex market in 2011-12 in which the national currency lost almost 70% of its value within days.

Private businesses and industries are also eagerly awaiting the unification of foreign exchange rates with the head of the Tehran Chamber of Commerce, Industries, Mines and Agriculture saying this week conditions are ripe for the long-awaited unification plan to finally become reality.

Tax Reforms Crucial

A national consensus has emerged to put an end to the dangerous over-dependency on oil income, the economic minister said, adding that officials and businesses alike realize that a healthy and workable tax regime is crucial and must replace the oil export income.

But tax affairs too are under the burden of their own contradictions. To increase tax income, Tayyebnia said "structural reforms must begin, a process that was started by the current government."

The minister acknowledges that tax pressures hit the production sector harder than others. From 2001 onwards, he said, several schemes were launched to gradually ease the tax burden on the production sector and move it toward consumers to help curb production costs. "But the policy was not successful and we still have not managed to totally shift value-added taxes toward the consumer. Therefore we must first remove this dilemma."

The official spoke of the Mechanized Sales System Bill which has been devised in collaboration with the Iran Chamber of Guilds and is being reviewed in the parliament, pending approval.

"Due to the importance of this bill, the Ministry of Economy has agreed to shoulder all the expenses of this system and for five years, everyone entering the system will be able to enjoy tax exemption."

Elaborating on the system, Tayybenia said the tax regime as a whole is focused on organizing data pertaining to the system. "In this scheme, all data, namely information about taxpayers and business-owners, their income and all costs relating to organizations and entities will be gathered and processed."

Censuring Iran's banking system as sick and plagued with "unsuitable interest rates", he said the banking sector is unable to provide credit to businesses and as such, lack of an access to financial resources is one of the most pressing problems of the production sector.

The highest monetary decision-making body – the Money and Credit Council – voted in July to lower lending rates by two percentage points. Earlier private banks had voluntarily lowered their one-year deposit rates from 18% to 15%.

"Iran's banking system is also grappling with other problems," he said referring to the cuts in interest rates by the current government. "Reforming the banking system is the first priority of the banks and the government debt to banks is one of the most serious problems."

The minister recalled that the government owes banks one quadrillion rials ($32.4 billion) while the private sector debt and troubled credit in the banking sector too is very high.

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merican aircraft maker Boeing is making progress on a deal to provide more than 100 commercial airplanes to Iran, though none will be delivered in 2016, the company’s top executive said on Tuesday.

The deal is part of efforts to rebuild Iran’s aging fleet, an agreement included in a 2015 pact between Tehran and six world powers to lift most western sanctions in exchange for limiting Iran’s stockpiles of substances that could be used to make nuclear weapons.

“We won’t deliver any aircraft under that deal this year; these are deliveries that are a year, two, downstream,” Reuters quoted Boeing Chief Executive Officer Dennis Muilenburg as saying on the sidelines of a conference in Chicago on future technologies.

“But it’s a significant opportunity for us and I’m pleased to see that we’re making steady progress.”

The announcement comes as Iranian officials have said they expect delivery of a few Airbus planes by the end of 2016.

Iran announced plans in January to buy 118 jets worth $27 billion at list prices from Europe’s Airbus, but has complained about unexpected delays in receiving US licenses that are needed due to the large number of US-supplied parts.

The Airbus accord covers 45 single-aisle planes comprising 21 from the current generation of A320 family and 24 re-engined A320neos. There are also 73 wide-body aircraft, including 27 A330s, 18 A330neos and 16 of Airbus’s latest A350s, plus 12 A380s. Iran later said it may not include the A380s in the order.

Boeing has also agreed to provide jets to Iran as it emerges from sanctions.

Frustrated with the delays, an Iranian official said last month that the Airbus deal could be reduced by six airplanes and the Boeing deal could be clipped by one jet to 108 aircraft instead of 109.

Muilenburg said Boeing is “in the final stages of working through the deal structure with our customers in Iran” while also working through the US government licensing process.

A new round of talks between Iranian airlines and the French and the American plane manufacturers kicked off late-September in Tehran, after they said they had the US administration’s permits to do business with Iran.

On September 21, US Treasury Department Office of Foreign Assets Control allowed Boeing to sell more than 100 planes to the Islamic Republic, while granting Airbus licenses to start exporting the first 17 jets of its Iran order.

Boeing’s government approval came for the first time in almost 40 years, paving the way for the biggest business transaction between the two nations since the 1979 Islamic Revolution.

Boeing’s last airplane deliveries to Iran consisted of 747 jumbos that arrived in 1977, two years before the revolution, according to the company’s website.

The Islamic Republic’s flag carrier would add more of the iconic, humpbacked 747s, as well as 777 and upgraded 777X wide-body jets under a $17.6 billion order for 80 Boeing aircraft. The US manufacturer is also helping Iran Air line up another 29 planes from leasing companies.

The company faces risks and uncertain rewards, as it vies with Airbus to replace Iran’s aging fleet. Congressional opponents have vowed to block the exports. Boeing may also need to leave wiggle room to back out of any potential orders if the next US president decides to reinstate sanctions.

Most noticeably, Airbus has an immediate numbers advantage relative to Boeing in terms of aircraft purchases. Airbus’s initial amount is 40% higher than Boeing’s as a consequence of Airbus submitting its licensing application sooner and receiving “first mover” advantage.

However, this agreement comes with some important caveats. Any aircraft that the two companies sell to Iranian airlines must be used for the sole purpose of commercial passenger flights. Typically, aircraft are not retired once they exceed a certain number of flight hours as passenger jets. Older aircraft are regularly turned over for use as freight transporters, which help squeeze out additional service life.

Nonetheless, as per the terms of the agreement, these aircraft are restricted from eventually undergoing this conversion. Moreover, resale to any entity or organization that remains under US sanctions within the country is expressly prohibited. As these provisions can realistically chip off some of the intrinsic value of these aircraft, the financing element also becomes more complicated.

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On Wednesday the euro exchanged hands at 40,060 rials in the markets, marking 0.5% growth compared with yesterday’s close. The British pound, however, experienced fell 0.32% and bought 46,300 rials.  

The government is planning to unify the forex rates by the end of the current fiscal year (ending in March 2017). A single forex rate regime is expected to help Iran reintegrate with global economy at a faster pace.

Masoud Nili, President Hassan Rouhani’s economic advisor said on Tuesday the national budget for 2017-18 will be prepared based on a single currencyrate.

The private sector has long begged for the implementation of the plan, as it believes the move would minimize speculative activities in the markets and curb rent-seeking and corruption.

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26 minutes ago, screwball said:

merican aircraft maker Boeing is making progress on a deal to provide more than 100 commercial airplanes to Iran, though none will be delivered in 2016, the company’s top executive said on Tuesday.

The deal is part of efforts to rebuild Iran’s aging fleet, an agreement included in a 2015 pact between Tehran and six world powers to lift most western sanctions in exchange for limiting Iran’s stockpiles of substances that could be used to make nuclear weapons.

“We won’t deliver any aircraft under that deal this year; these are deliveries that are a year, two, downstream,” Reuters quoted Boeing Chief Executive Officer Dennis Muilenburg as saying on the sidelines of a conference in Chicago on future technologies.

“But it’s a significant opportunity for us and I’m pleased to see that we’re making steady progress.”

The announcement comes as Iranian officials have said they expect delivery of a few Airbus planes by the end of 2016.

Iran announced plans in January to buy 118 jets worth $27 billion at list prices from Europe’s Airbus, but has complained about unexpected delays in receiving US licenses that are needed due to the large number of US-supplied parts.

The Airbus accord covers 45 single-aisle planes comprising 21 from the current generation of A320 family and 24 re-engined A320neos. There are also 73 wide-body aircraft, including 27 A330s, 18 A330neos and 16 of Airbus’s latest A350s, plus 12 A380s. Iran later said it may not include the A380s in the order.

Boeing has also agreed to provide jets to Iran as it emerges from sanctions.

Frustrated with the delays, an Iranian official said last month that the Airbus deal could be reduced by six airplanes and the Boeing deal could be clipped by one jet to 108 aircraft instead of 109.

Muilenburg said Boeing is “in the final stages of working through the deal structure with our customers in Iran” while also working through the US government licensing process.

A new round of talks between Iranian airlines and the French and the American plane manufacturers kicked off late-September in Tehran, after they said they had the US administration’s permits to do business with Iran.

On September 21, US Treasury Department Office of Foreign Assets Control allowed Boeing to sell more than 100 planes to the Islamic Republic, while granting Airbus licenses to start exporting the first 17 jets of its Iran order.

Boeing’s government approval came for the first time in almost 40 years, paving the way for the biggest business transaction between the two nations since the 1979 Islamic Revolution.

Boeing’s last airplane deliveries to Iran consisted of 747 jumbos that arrived in 1977, two years before the revolution, according to the company’s website.

The Islamic Republic’s flag carrier would add more of the iconic, humpbacked 747s, as well as 777 and upgraded 777X wide-body jets under a $17.6 billion order for 80 Boeing aircraft. The US manufacturer is also helping Iran Air line up another 29 planes from leasing companies.

The company faces risks and uncertain rewards, as it vies with Airbus to replace Iran’s aging fleet. Congressional opponents have vowed to block the exports. Boeing may also need to leave wiggle room to back out of any potential orders if the next US president decides to reinstate sanctions.

Most noticeably, Airbus has an immediate numbers advantage relative to Boeing in terms of aircraft purchases. Airbus’s initial amount is 40% higher than Boeing’s as a consequence of Airbus submitting its licensing application sooner and receiving “first mover” advantage.

However, this agreement comes with some important caveats. Any aircraft that the two companies sell to Iranian airlines must be used for the sole purpose of commercial passenger flights. Typically, aircraft are not retired once they exceed a certain number of flight hours as passenger jets. Older aircraft are regularly turned over for use as freight transporters, which help squeeze out additional service life.

Nonetheless, as per the terms of the agreement, these aircraft are restricted from eventually undergoing this conversion. Moreover, resale to any entity or organization that remains under US sanctions within the country is expressly prohibited. As these provisions can realistically chip off some of the intrinsic value of these aircraft, the financing element also becomes more complicated.

Did you not post an article showing that Iran has already received a plane ????????????????

 

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