Iranian Rial

screwball · October 19, 2016

The Central Bank of Iran's figures show the government’s tax revenues increased by 25% in the first five months of the current Iranian year (started March 20) compared with last year's corresponding period to stand at 356 trillion rials ($9.9 billion at market exchange rates).

Revenues from direct tax, including taxes on legal entities, income and wealth, stood at 198 trillion rials ($5.5 billion), and indirect taxes like import duties, tax on goods and services and value added tax, accounted for 158 trillion rials ($4.4 billion) of the figure.

Tax revenues from sales of oil products stood at 26,300 billion ($732.99 million). For cigarettes, the sum stood at 1,500 billion ($41.8 million). Revenues from VAT amounted to 83,000 billion ($2.31 billion), IRNA reported.

According to Iran National Tax Administration’s head of Direct Taxation Department, taxation will meet 44% of the government’s expenses this year.

“We predict tax revenues to reach 870 trillion rials ($22.45 billion) this year, 60% of which will be raised through direct taxation,” Nader Jannati also told IRNA last month.

Jannati said small business owners and professionals will only cover 6% of the 500 trillion rials that will be raised through direct taxation.

“Most of the revenues will be collected from companies and wealthy individuals,” he said.

About 12% of the revenues will come from taxing public and private sector employees, double the amount raised from business owners.

INTA chief, Kamel Taqavinejad, says the tax administration is establishing a special office to tackle tax evasion.

The formation of the High Office for Combating Tax Evasion will help the government increase its low tax receipts.

Government tax revenues accounted for hardly 6.3% of gross domestic product in the current fiscal year. That is lower than what Iran’s war-ravaged and poverty-stricken neighbor, Afghanistan, can muster.

The average that member states of the Organization for Economic Cooperation and Development—a club of developed economies—collect is 34.8% of GDP.

Low oil prices, deep recession and a legacy of atrocious public finances have forced the government’s hand. Now it is making every effort to overhaul the tax regime to increase revenues.

INTA has a lot of ground to cover, owing 493 trillion rials in tax from prior years.

Taqavinejad plans to collect 45 trillion rials ($1.27 billion) of it before the end of the fiscal year.

However, the real battle is about curbing tax evasion and fraud, considered to be widely prevalent in Iran.

Taqavinejad estimates that between 130 and 300 trillion rials ($3.67 billion-8.46 billion) worth of taxes are being evaded.

The main missing factor for the tax administration is data. INTA says it has come up with new databases and data-matching software to catch tax evaders, as electronics will make falsifying records, hiding assets and other swindling ploys harder to pull off.

“The focus is now on expanding the tax base and targeting entities currently exempt rather than raising taxes for those already paying,” the government spokesman, Mohammad Baqer Nobakht, said earlier this year.

According to Economy Minister Ali Tayyebnia, the government’s newly-drafted direct taxation code overhauls tax exemptions, adds new taxpayers and is geared toward boosting manufacturing

screwball · October 19, 2016

“Most of the revenues will be collected from companies and wealthy individuals,” he said.

hmmmm.....

markb57 · October 19, 2016

come on US. Let go!

screwball · October 19, 2016

Britain's Vodafone Enters Iranian Phone Market

- Vodafone and HiWEB, a leading Iranian ISP, today jointly announced a new non-equity Partner Market agreement for Iran. Vodafone will assist HiWEB in rolling out and modernising network and IT infrastructure, expanding the fixed and mobile internet services - under the HiWEB brand - that HiWEB can offer to its Iranian consumer and corporate customers. - 10/19/16

screwball · October 20, 2016

The international Monetary Fund’s latest “Regional Outlook" for the Middle East and Central Asia projects the growth of Iran’s broad money at 12.5% and 10.2% in 2016 and 2017 respectively , marking a continued downward trajectory from 2015 when the figure was 15.3%.

IMF also forecasts a decline in Iranian government’s average gross debt in 2016. While the government’s gross debts amounted to 15.9% of the GDP, it is predicted to stand at 14.9% for 2016, and 15% in 2017. Average government gross debt in the MENAP (Middle East, North Africa, Afghanistan and Pakistan) region is estimated to reach 43% of the region’s total GDP– 5.3% higher than 2015.

Total amount of Iran’s gross official reserves is predicted to surge by $23.3 billion in 2016, reaching $156 billion. The amount is expected to stand at $178.8 billion in 2017.

Current account balance is estimated to reach $17.2 billion in 2016, $9 billion more than in 2015. However, the current account balance of Iran is estimated to stand at $14.6 billion in 2017.

The Washington-based lender also forecasts the Iranian government’s general fiscal balance to account for -1.1% of Gross Domestic Product. The amount is estimated to lower-1% of GDP in 2017.

Iran’s headline growth has been revised up to 4.5% this year, “owing to faster-than-expected increases in oil production and exports following the unwinding of sanctions,” the report reads.

The Fund also says oil output has risen to 3.6 million barrels per day, resulting in positive spillovers to the non-oil economy, although the recovery in oil output is expected to taper sharply next year as production approaches pre-sanctions levels.

Iran exports of goods and services amounted to $78.3 billion in 2015, according to the Fund. The amount is expected to reach $95.2 billion in 2016 and $103 billion in 2017.

“The growth dividend from the lifting of sanctions is materializing only gradually, with investors remaining cautious, and reintegration into global financial markets and domestic reforms proceeding slowly.”

In early October, IMF staff estimated that the non-oil fiscal deficit in 2016-17 will increase by 0.5 % of non-oil GDP to reach 8.9 % of non-oil GDP (or 7.7 %of total GDP).

Inflation

The inflation rate in Iran will drop to 7.2% in 2017 from 7.4% in the current year, according to the IMF.

“Iran is making further headway in its disinflation program, bringing consumer price increases to single digits for the first time,” in a long time, notes the body.

The IMF had earlier predicted that the unemployment rate would dip slightly to reach 11.2% in 2017 from 2016's 11.3%. This comes as unemployment in Iran had taken a turn for the worst in the current year, with joblessness reaching 11.3%, higher than the 10.8% in the prior year.

The Iranian government is implementing far-reaching, ambitious, reforms to support a sustained acceleration in growth, according to the IMF. It plans to clear government arrears, recapitalizes banks and strengthen supervisory powers

screwball · October 20, 2016

The Central Bank of Iran in a statement has assured that its unpublished balance sheets will finally be made public soon adding that the delay in its release has nothing to do with the government's debts to the CBI as was claimed in a recent report.

On Tuesday, Payesh news website published a report claiming that the governor of the CBI Valiollah Seif had sent a letter to President Hassan Rouhani, formally asking him to clear the government debts to the central bank.

Citing "an informed source" the website claimed it "would not look good" for the government if the CBI balance sheets came out because they would reveal the scale and scope of the government's unmet commitments.

"Before anything, it must be noted that such a letter does not exist," the central bank statement said. "Therefore referring to a fictitious and false letter and publishing a news item based on it is far from professionalism and ethics."

The statement then delves into the matter of CBI's unpublished balance sheets (the last one was published in 2013), promising that statements for 2014 and 2015 will soon be made public.

"Unlike false claims made in the news article, the general assembly relating to 2014 was convened in early 2016 with the goal of approving the CBI balance sheet of the same year. The president was also present and the event was covered by the media."

"The balance sheet for 2014 will be finalized and published soon," the central bank said.

Furthermore, it said the CBI balance sheet for 2015 "has been drawn up and is being finalized" and the relevant general assembly will be held in the foreseeable future.

The CBI notes that in contrast to what was claimed, a hiatus in the publication of its balance sheets since 2013 is "natural" and there have been precedents in the past when balance sheets were published with delays.

"The aforementioned delay was because the intention was to publish the finalized data. To meet the data needs of economic experts and pundits, the relevant economic data will be published in the CBI's other publications," adds the statement.

In conclusion the statement says "the CBI's approach toward publishing economic statistics has been clear and linking balance sheets to repayment of government debt is utterly false."

It is said that the government owes over one quadrillion rials ($29 billion) to the banks alone, a legacy it inherited from its predecessor.

Iran’s economy has beat expectations: IMF

Economy

October 19, 2016

The head of the International Monetary Fund in the Mideast said Iran’s economy has beat expectations by growing by 4.5 percent this year.

The Islamic Republic could keep that pace if it can “move on addressing some of the other restraints in their economy.”

Chief among them is modernizing both its banking system and its manufacturing industry, both of which were affected by sanctions, Masood Ahmed told The Associated Press on Tuesday.

Iran’s economy has charged ahead through boosting oil production close to levels seen before Western nations imposed economic sanctions over its nuclear program. Iran will have to modernize both its banking system and its manufacturing industry, as well as allow more foreign direct investment in the country, to continue that growth.

“The big challenge for Iran is can you sustain that 4-, 5-percent growth over the medium term or is it just a one-time increase you get?” Ahmed asked. “They can, but they have to move on addressing some of the other constraints in their economy.”

He also said that Mideast countries are making efforts to cope with low oil prices, though more needs to be done.

Oil-producing countries “still have some way to go” in reforming the government sector and cutting spending, he noted.

screwball · October 20, 2016

The International Monetary Fund (IMF) said on Wednesday that economic conditions in Iran are improving and Iran's economy has beat expectations by growing by 4.5 percent this year compared with 0.4 percent in 2015and could keep that pace.

The head of IMF in the Mideast Masood Ahmed further told The Associated Press that nations are making efforts to cope with low oil prices, though more needs to be done.

He said oil-producing Mideast countries 'still have some way to go' in reforming the government sector and cutting spending.

Ahmed said that Iran's economy can "move on addressing some of the other restraints in their economy, chief among them is modernizing both its banking system and its manufacturing industry, both of which were affected by sanctions."

The Persian Gulf nation is seeking to boost production at oil and gas fields, and will need about $200 billion over the next four years in energy investments, according to figures provided by Oil Minister Bijan Namdar Zanganeh on Tuesday.

Iran wants to produce about 4 million barrels of crude a day to regain its pre-sanctions share of the market, Zanganeh said Tuesday. Iran's output was 3.63 million barrels a day in September, data compiled by Bloomberg show.

Talks with investors

Iran is negotiating with 16 international energy companies to help operate and manage 50 oil and natural gas projects to boost production after years of international sanctions.

The projects are feasible even with oil at $40 a barrel, Gholamreza Manouchehri, the deputy director of the National Iranian Oil Co., told reporters in Tehran on Wednesday, reported Bloomberg.

The South Azadegan field on Iran's southwestern border will be the first deal announced, and probably needs $10 billion to add 600,000 barrels a day of output, he said.

"We have a lot of companies approaching NIOC," Manouchehri said. "I'm not sure when we'll sign the first contract. I hope it will be earlier" than a year from now.

Iran is recovering from sanctions that choked off investment in its oil and gas industry. An easing of sanctions in January has allowed the country to ramp up oil exports, to 2 million barrels a day in July from 1.4 million at the end of last year, Joint Organizations Data Initiative data show. Brent crude, the international benchmark, was trading at about $52 a barrel on Wednesday.

screwball · October 20, 2016

Japanese traders including Marubeni Corp. and Sumitomo Corp. that stopped buying Iranian oil during Western sanctions are looking to resume imports, potentially by year-end, industry sources said.

Conservative Japanese firms have so far held off taking Iranian crude due to a lack of internationally acceptable insurance coverage, but are looking at ways of using cover provided by the Japanese government, reported Reuters quoting sources.

The traders seeking to restart purchases together imported around 50,000 barrels per day (bpd) of Iranian oil before the sanctions and renewed purchases would give a boost to Tehran's aim of increasing its exports to 4 mbd.

Other Asian buyers have stepped up purchases of Iranian oil since sanctions were lifted in January, with Iranian imports to Asia, excluding Japan, jumping to 1.60 mbd in August — up 92 percent on a year ago.

Buyers have taken advantage of a scheme put together by ship owners to plug a shortfall in insurance cover due to ongoing restrictions on US-domiciled reinsurers, but Japanese firms have been reluctant to take part.

Trading houses have been waiting for private shipping insurance to return to full coverage, which could come as early as this year. But some traders now hope to piggyback on a Japanese government scheme that has been providing ongoing cover for so-called 'essential' imports of Iranian oil throughout the sanctions.

The government-cover enabled refiners and trading houses such as Mitsubishi Corp. and Toyota Tsusho to import Iranian oil even after the sanctions were imposed in 2012.

"One solution would be to co-load oil with other buyers," said a source with a trading house. Oil loaded on vessels already covered by the government scheme would also be fully insured, they said.

Earlier this month, Mitsui & Co. resumed taking Iranian oil for the first time since at least 2012, co-loading Iranian condensate with a major Japanese refiner on a tanker, a source familiar with the shipping schedule said. Mitsui declined to comment.

Marubeni, which bought Iranian crude, condensate, naphtha and fuel oil until 2012, confirmed it had been working to restart purchases. A company source told Reuters it hoped to resume imports by the end of the year.

Sumitomo, which bought liquefied petroleum gas (LPG) from Iran before the sanctions, was also looking to buy Iranian oil and LPG as long as prices were competitive, an industry source close to the matter said.

Itochu Corp. said it was considering resuming imports of Iranian oil, while trading house Kanematsu Corp. which last bought Iran crude in 2010, is also looking to resume purchases at an early date, but has not yet lined up any customers, a company source told Reuters.

screwball · October 20, 2016

Economy
Domestic Economy

Thursday, October 20, 2016

New Wharf on Kish Island

An under-construction 35,000-ton wharf on Kish Island will become operational by October 2017, says managing director of Kish Free Zone, Ali Asghar Mounesan, “allowing ocean-going vessels to dock on this southern Iranian island”. The official added that the construction of Hendurabi airport and port is almost complete and will become operational soon, ISNA reported. Hendurabi is one of the four islands in the Lavan-Kish group of islands in the Persian

screwball · October 20, 2016

World Economy

Thursday, October 20, 2016

New Banking Rules Hurt European Lenders

Controversial new rules designed to strengthen the banking sector risk is damaging lenders’ ability to support the economy, the head of the Netherlands’ largest bank by assets said.

The comments underline tensions between Europe and global regulators only weeks before the new rules are due to be completed, Nasdaq reported.

Ralph Hamers, chief executive of Dutch bank ING, told a Frankfurt journalists’ club that in some areas, new rules—which critics refer to as “Basel IV”— would require capital increases. “The normal reaction of banks is to shrink your balance sheet,” he added.

Banks can’t help support the economy “if we don’t grow as banks,” he said. This scenario isn’t “supportive of what Draghi’s trying to do and what Juncker’s trying to do,” he said, referring to European Central Bank President Mario Draghi and European Commission President Jean-Claude Juncker.

Draghi’s institution has for years tried to prod banks to boost their lending to the real economy via ultra-cheap loans to banks and purchases of assets off banks’ balance sheets, in the hope that lenders would pass the new funds to the real economy. Juncker has promoted a €315 billion ($346.42 billion) investment plan to support growth on the continent.

The continent’s banks argue that the proposed new rules would hurt European lenders in competition against American rivals. The rules are designed to limit banks’ ability to calculate the riskiness of mortgage assets the banks hold.

Unlike their American counterparts, European banks generally hold mortgage loans on their balance sheets. As a result, they have to offset more capital against those loans. Despite the objections, the committee, based in Basel, Switzerland, wants the rules finalized by the end of the year.

screwball · October 20, 2016

TEHRAN, Iran — President Mahmoud Ahmadinejad said Wednesday his government is planning to lop off zeros from its currency in an apparent fight against Iran's double-digit inflation.

Ahmadinejad's government is preparing to enact a law in April that would sharply slash energy and food subsidies. The move could provoke more unrest in a country already struggling under international sanctions, high inflation and a government crackdown on the opposition.

"It is planned to remove zeros off currency and make the rial value real," Iran's government website quoted Ahmadinejad as saying. "The value of rial, under the law, is calculated on the basis of the price of gold. For some reason, the rial has been devaluated and we have to return its value to the one existing in the law."

The Iranian rial is now traded at 10,000 rials to one U.S. dollar. That compares to 70 rials against the dollar in 1979, the year an Islamic revolution toppled the pro-Western Shah Mohammad Reza Pahlavi.

The governor of Iran's Central Bank, Mahmoud Bahmani, last month said three or four zeros will be removed from the currency, depending on the results of the government's subsidy cuts.

The law to slash fuel and food subsidies was formally approved by Iran's constitutional watchdog Guardian Council last week. The law would gradually cut energy subsidies, bringing heavily discounted fuel prices closer in line with international prices.

Officials say the step is needed to recoup some of the roughly $100 billion spent yearly on subsidies by OPEC's second largest oil exporter. Subsidies currently consume about 30 percent of the government budget at a time when high spending and last year's collapse of oil prices have hammered Iran's economy.

Advertise

The aim is to channel the funds directly at the poorer segments of the population and building projects.

Of the estimated $100 billion savings, the government promises to spend half on cash payments to families it considers vulnerable. That money would be give to families over a five-year period.

Another $30 billion would be earmarked for industries and economic infrastructure projects, and the remaining $20 billion will be put in the government's treasury for future plans and projects.

Critics say that providing that much money to the government will spread corruption amid concerns that some of the cash will be spent to undermine political opponents instead of improving the economy.

Ahmadinejad said Iranians should not fear the subsidy cuts.

"There is nothing to be worried about ... Living conditions will get better if subsidies are paid (in cash) to the people," he said.

Ahmadinejad said 70 percent of Iran's 70 million population will get initial cash payments. The rest of the nation will get it at some point in the future, he said.

Experts have warned that a monthly cash payment of up to $20 per person won't be enough to balance the 60 percent inflation rate Iranians will face in April.

Iran's economic woes have been one of Ahmadinejad's biggest challenges.

Interesting old old articke but it talks about the law and gold, if you remember I posted an extract from a book where it said during ww2 1'rial was equal to 4 grams of silver?..

screwball · October 20, 2016

Don forget they have already approved the removal of four zeros...

screwball · October 20, 2016

http://investmentwatchblog.com/iranian-central-bank-announced-dropping-4-zeros-from-iranian-currency-strengthening-to-world-level/

will take 1.2 any day...

screwball · October 20, 2016

Iran postpones currency redenomination

ASHARQ AL-AWSATJanuary 13, 2014, 12:10 am 845

A picture taken on September 30, 2012 shows an Iranian woman paying with a 20000 rial banknote, bearing a portrait of Iran’s late founder of islamic Republic Ayatollah Ruhollah Khomeini, to a grocer in the Iranian capital Tehran. (AFP Photo/Atta Kenare) London, Asharq Al-Awsat—An Iranian central bank official says that Iran has once again delayed plans to revalue the Iranian riyal by eliminating some zeros from the country’s currency, although the option remains on the table.

“The issue will be included in the central bank’s serious agenda as soon as the economic situation has improved and the inflation reduced,” said Akbar Komijani, the Central Bank of Iran’s economic deputy, in an interview with the Mehr news agency published on Sunday.

He added that Iran’s central bank attaches great importance to the elimination of zeros from the currency, but it will not be considered as a priority, at least not during the next few months.

The secretary general of the central bank, Mahmoud Ahmadi, said last week that the eliminations of zeros from the country’s currency will be followed up in the second half of the next year of the Iranian calendar, which runs from October 2014 till March 2015.

Economic experts believe that the fate of plans—formed and presented during the previous government of President Ahmadinejad—to delete zeros from the Iranian currency is uncertain under the current government, in light of changes in the rial’s value.

Iran’s former economy minister Shamseddin Hosseini said in 2011 that the country was set to lop three zeros off the end of its currency, which has weakened steadily over many years, despite attempts to keep it loosely pegged to the US dollar. Iran “will remove three zeros from the national currency this year on the condition that the prerequisites [for doing so] are achieved,” the minister said.

The value of the dollar experienced a sharp decline in Iran in early 2012.

The Iranian rial currently stands at around 30,000 to the US dollar, compared to 10,000 two years ago.

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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support sagging rial DUBAI, (Reuters) - Iran launched a fresh bid on Monday to stabilise its falling currency, opening a foreign exchange centre that provides government-subsidised U.S. dollars to import some goods as the country struggles with Western economic sanctions. The rial's street value has tumbled by more than half in the last…">Iran launches forex centre to support sagging rial

DUBAI, (Reuters) - Iran launched a fresh bid on Monday to stabilise its falling currency, opening a foreign exchange centre that provides government-subsidised U.S. dollars to import some goods as the country struggles with Western economic sanctions. The rial's street value has tumbled by more than half in the last…

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gi

pokerplayer · October 20, 2016

2 hours ago, screwball said:

http://investmentwatchblog.com/iranian-central-bank-announced-dropping-4-zeros-from-iranian-currency-strengthening-to-world-level/

will take 1.2 any day...

So would I SB even though the article is close to 4 years old. !! Hope they never changed there mind.

pp

millionaire in training · October 20, 2016

2 hours ago, pokerplayer said:

So would I SB even though the article is close to 4 years old. !! Hope they never changed there mind.

pp

My thoughts exactly . Old article. Hope they still go through with it. 1.20-1 would be a good start. Then lets hope they let it float. Then this party will start getting hot.

millionaire in training · October 20, 2016

4 hours ago, screwball said:

Don forget they have already approved the removal of four zeros...

So if they already approved it when will it show up for us to see ?

screwball · October 20, 2016

8 hours ago, pokerplayer said:

So would I SB even though the article is close to 4 years old. !! Hope they never changed there mind.

pp

Remember there are more recent articles....I found the rate the most interesting

screwball · October 20, 2016

5 hours ago, millionaire in training said:

So if they already approved it when will it show up for us to see ?

I believe when they move to single forex rate!

screwball · October 20, 2016

Denmark's Maersk shipping line to resume trade with Iran

Tehran, Oct 20, IRNA – Danish international marine transportation company Maersk will resume transportation of goods to Iran.

Denmark's Maersk that had cut its trade relations with Iran five years ago due to the sanctions imposed by the West on Iran will resume its activities soon.

Maersk announced on Thursday that its customers can send their cargo to Iran via sea by Maersk cargo ships.

A major portion of imports, including foodstuff and consumer goods such as cars, to Iran take place via sea.

2050**2050

screwball · October 20, 2016

Let's see kuwait is number one oil producer, then iraq soon to be and then iran....so if kuwait has been at 3$+ what do you think iraq and Iran want to be at?

WheresmyRV? · October 21, 2016

4 hours ago, screwball said:

Let's see kuwait is number one oil producer, then iraq soon to be and then iran....so if kuwait has been at 3$+ what do you think iraq and Iran want to be at?

Iran has to be around 2+ I am thinking. Iraq is a blissful mess right now and I don't see that happening for a long time.

screwball · October 21, 2016

Quote