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Swedish PM to lead economic delegation to Tehran

دیدار رئیس اتاق با سفیر سوئد
News ID: 3862510 - Wed 28 December 2016 - 14:37
TEHRAN, Dec. 28 (MNA) – Prime Minister of Sweden Stefan Löfven is scheduled to visit Tehran in February 2017 heading a high-ranking economic delegation.

Head of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) Gholamhossein Shafei and Swedish Ambassador to Tehran Helena Sångeland met and discussed development of economic relations as well as removal of barriers to mutual cooperation between Iranian and Swedish economic activists.

Sahfei, while recalling that the two sides began official relations in 1920, said, despite the long distance, Iran and Sweden enjoy age-old and excellent economic and political relations as Volvo and Scania companies have always provided service to Iranians.

He pointed to presence of Swedish delegations in Iran following JCPOA implementation saying “over years, Iranian traders have had good relations with Swedish counterparts and both sides are required to join hands to resolve existing banking and insurance issues.

The official voiced satisfaction towards holding a new round of Joint Commission meeting following a long hiatus; “ICCIMA, as a private sector department, will offer necessary support for reinvigoration of bilateral economic ties.”

Sahfei called for alleviation of banking and monetary restrictions expressing hope that the measure will bolster trade turnover between the two countries.

Helena Sångeland, for her part, referred to long history of economic and political relations between the two countries stressing that Swedish brands are reliable as companies like Scania carried on activities even during sanction years.

She further announced the upcoming visit of her country’s prime minister to Tehran in February saying “Prime Minister of Sweden Stefan Löfven makes foreign trips only twice a year and one trip for 2017 will be devoted to Iran indicating the importance of bilateral ties with Tehran.”

The Swedish envoy expressed happiness towards emergence of new opportunities between the two countries following the nuclear deal adding “a number of delegations have been exchanged between the two sides over the past year the most significant of which was the visit to Iranian FM Zarif to Stockholm.”

The official, while recalling the visits of several Swedish ministers and officials to Iran, emphasized the need to exploit new opportunities; “reopening of Sweden’s economic center in Tehran would give way to presence of small and medium businesses for investment and joint venture.”

Sångeland went on to call for immediate removal of banking barriers though Swedish banks and firms would continue their activities in Iran regardless of existing obstacles.

“A proper mechanism exists in the Sweden’s Embassy in Tehran through which Iranians can obtain commercial visas,” highlighted the official while maintaining that certain issues still cause delays in the process.

HA/3862191

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  1. National
Wednesday, December 28, 2016

JCPOA Helped Remove Economic Clogs

 

Adeputy foreign minister highlighted the merits of the 2015 nuclear deal with major powers, saying it has helped revive key sectors of the domestic economy.

"After the implementation of JCPOA and removal of cruel sanctions, many clogged economic paths were cleared and today we witness a surge in oil production and sale," Morteza Sarmadi was also quoted as saying on Monday by IRNA.

He was using the formal title of the historic agreement, the Joint Comprehensive Plan of Action reached by Iran and world powers.

Next month, it would have been in force for one year to lift international sanctions targeting the Islamic Republic's major economic sectors, including oil and banking, in return for time-bound constraints on its nuclear program.

Years of international sanctions severely undermined Iran's global position as a top oil exporter. However, it has managed to recoup much of the lost market share.

Sarmadi said promoting trade with other countries lies at the core of the Foreign Ministry's agenda.

"Attracting foreign investment and helping increase non-oil exports are being given serious attention in the economic tasks entrusted to our missions abroad," he said.

Iran has complained over the remaining US sanctions that include a ban on the use of the dollar and the US financial system to clear Iran-linked transactions.

Overseas banks and firms have backed away from Iran's lucrative yet opaque market, fearing they might incur huge fines for unwittingly falling foul of US restrictions.

"Counteracting Iranophobia and US pressures is on the Foreign Ministry's agenda to develop trade relations and improve business activity," Sarmadi said.

Adding to complications, US Republican lawmakers, who control the House of Representatives and Senate and unanimously oppose JCPOA, have introduced frequent anti-Iran measures to interfere with the nuclear deal's implementation.

In its latest move, the US Congress almost unanimously passed a bill to extend for a decade the Iran Sanctions Act, which was first adopted in 1996 to target Iran's energy sector. It became law without requiring the signature of US President Barack Obama.

The deal's failure to bear the promised benefits so far and the renewal of the US sanctions law have been seized upon by Rouhani's conservative rivals ahead of the 2017 presidential election to reinforce their criticism of the action plan championed by him.

They insist it has conceded too much to the other side and compromised the redlines of the establishment.

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Aprivate-sector representative has welcomed the Central Bank of Iran’s recent decision to allow banks to handle foreign exchange transactions at a free-market rate by calling it a “good opportunity”.  

Lotfollah Saeedi, the deputy director of Money and Capital Commission of Tehran Chamber of Commerce, Industries, Mines and Agriculture, added that the potential involvement of the banking system in the unofficial currency market could also improve the market, Banker.ir reported.

“The banking system engaging in the purchase and sale of currency at market rates would entail three positive benefits: it would be a good opportunity for the banking system, exporters would support it and it would improve the market,” he said.

The Central Bank of Iran recently invited businesses to procure their currency requirements from the banking system at market rates. The proposal was received well and is deemed a prelude to the longstanding plan to unify the dual exchange rate regime of the Iranian market.

Back in July, the banking system got the thumps-up from CBI to trade in foreign currencies at the open market rate.

Iran operates two exchange rates, a free market rate and an official rate used for some state transactions, set by the central bank at around 32,300 rials.

The greenback has been rallying for the past few weeks, passing the 40,000-rial to $1 threshold last Wednesday. The rial slipped further in the past days and was quoted in the free market at 41,500 to the dollar on Monday, which is an all-time record low for the rial. On Tuesday, the rial was quoted at 41,000 to the dollar.

In recent months, the central bank has raised the official rate gradually to shrink the gap between the two. It has said it wants to unify the exchange rate to make the economy more efficient and create a level field for private firms competing with state institutions with access to cheaper foreign exchange.

Referring to the proposal, Saeedi maintained that banks’ foray into the open currency market would be positive and could be a prologue for rate unification, but the first thing that must be considered is its implementation and results.

The entry of banking system into the currency market would entail changes for moneychangers.

The TCCIM official notes that this does not mean that they would be removed from the scene altogether, “but the banking system would supplant the bureaux de change to a certain degree”.

Saeedi stressed the importance of implementing the proposal, saying the banking system needs to act fast and maintain flexibility because “the way this plan is implemented will determine its extent of influence”.

A meeting was held at the Ministry of Economic Affairs and Finance to address the recent volatility in the currency market.

Officials with the ministry and the central bank, namely the treasury deputy, Rahmatollah Akrami, and CBI Vice Governor Akbar Komijani, attended the meeting to discuss market conditions and what to do next.

 Rate Moderation

Mohsen Bahrami Arz-Aqdas, the head of Trade Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture, said the rial will soon regain ground.

“Considering the formal stance of the government on the issue, forex rates will come down very soon,” he  also told ILNA.

Bahrami pointed to recent remarks made by government spokesman, Mohammad Baqer Nobakht, who had stressed that current fluctuations in the currency market are only temporary and a result of higher market demand.

“The current high rate of currencies in the market stems from various reasons, including Christmas travels,” he said. “The [upcoming] change in administration in the US has also impacted the dollar rates.”

The official noted that the election of Donald Trump to the White House has created doubts about Iran’s nuclear accord and “when these issues are resolved, the greenback’s rate against the rial will come down again”.

“In order for the rates to fall in the acceptable domain, the dual foreign exchange rate system must be abolished,” he said, without elaborating on the acceptable domain.

Bahrami claimed that in view of ongoing discussions in the parliament and the private sector, currency exchange rates will be moderated soon, though “prerequisites are needed for rate unification, a part of which is out of the government’s control”.  

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Just now, screwball said:

In recent months, the central bank has raised the official rate gradually to shrink the gap between the two. It has said it wants to unify the exchange rate to make the economy more efficient and create a level field for private firms competing with state institutions with access to cheaper foreign exchange.

 

Just now, screwball said:

Considering the formal stance of the government on the issue, forex rates will come down very soon,” he  also told ILNA.

 

1 minute ago, screwball said:

“In order for the rates to fall in the acceptable domain, the dual foreign exchange rate system must be abolished,” he said, without elaborating on the acceptable domain.

For you blue!

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This will put a smile on faces....as I said parliament needs to approve..

Changing Iran’s official monetary unit from rial to toman would cost a hefty 30 trillion rials ($922.7 million), announced the head of Majlis Economic Commission.

“Based on early estimates, at least 30 trillion rials must be spent to change the monetary unit and this is a very heavy cost. Therefore, any decision to remove one or several zeroes must be based on expert studies,” Mohammad Reza Pour-Ebrahimi was also quoted as saying by Banker.ir.

During a Cabinet meeting in early December, the government approved changing Iran’s monetary unit from rial to toman.

Rial is currently used in official documents and budget statements, although toman is the currency of choice for the Iranian people in daily transactions.

The parliament has yet to sign off on the plan which, upon implementation, would require the reprinting of all Iranian banknotes.

Pour-Ebrahimi’s comments come on the heels of those made by Hadi Akhlaqi, the CEO of Bank Mellat–a major private bank, who claimed that the “costs [of printing new banknotes] will not be significant”.

The head of the commission was critical of the plan’s timing, asking, “If we are going to do this, why not do it in a way that it would not impose more costs a few years down the road?”

Pour-Ebrahimi was referring to the fact that for years, a proposal has been put forward to lop off three to four zeroes from the national currency.

As per the current plan , the monetary change will see one zero removed, but as mentioned by a number of pundits and officials, implementing a currency switch now and executing the earlier proposal a few years later would only bring about unnecessary costs.

Pour-Ebrahimi noted that a six-month period would be required to complete the monetary change.

 More Zeros

“Therefore, it is our proposal that if the government wishes to change the monetary unit by removing one zero, it is better if it considers the matter of removing four zeroes that has already been the subject of various studies,” he stressed.

The senior lawmaker spoke of the positive effect of removing three to four zeroes from the national currency, saying it will ease calculations and create a more positive sense with respect to the national currency’s value against other currencies.

He stressed that removing one zero will have no significant impact on the economy.

Pour-Ebrahimi concluded by saying that the government can learn a thing or two from similar experiences of other nations such as Turkey in changing their monetary unit.

However, Ali Divandari, the head of Monetary and Banking Research Institute affiliated to the Central Bank of Iran, said the monetary change is “strictly a nominal change and removing zeroes is not being discussed”.

Speaking at a press conference, Divandari added that the change would have zero impact on business transactions.

He also said because the rial “would not be removed” and will stay on as a lesser currency to the basic toman, there is no need to reprint banknotes “unless current notes get worn-out or with their gradual elimination from the cycle, banknotes with the new monetary unit will be printed.

 

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“Therefore, it is our proposal that if the government wishes to change the monetary unit by removing one zero, it is better if it considers the matter of removing four zeroes that has already been the subject of various studies,” he stressed.

The senior lawmaker spoke of the positive effect of removing three to four zeroes from the national currency, saying it will ease calculations and create a more positive sense with respect to the national currency’s value against other currencies.

here endith the lesson...

Edited by screwball
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Aprivate-sector representative has welcomed the Central Bank of Iran’s recent decision to allow banks to handle foreign exchange transactions at a free-market rate by calling it a “good opportunity”.  

Lotfollah Saeedi, the deputy director of Money and Capital Commission of Tehran Chamber of Commerce, Industries, Mines and Agriculture, added that the potential involvement of the banking system in the unofficial currency market could also improve the market, Banker.ir reported.

“The banking system engaging in the purchase and sale of currency at market rates would entail three positive benefits: it would be a good opportunity for the banking system, exporters would support it and it would improve the market,” he said.

The Central Bank of Iran recently invited businesses to procure their currency requirements from the banking system at market rates. The proposal was received well and is deemed a prelude to the longstanding plan to unify the dual exchange rate regime of the Iranian market.

Back in July, the banking system got the thumps-up from CBI to trade in foreign currencies at the open market rate.

Iran operates two exchange rates, a free market rate and an official rate used for some state transactions, set by the central bank at around 32,300 rials.

The greenback has been rallying for the past few weeks, passing the 40,000-rial to $1 threshold last Wednesday. The rial slipped further in the past days and was quoted in the free market at 41,500 to the dollar on Monday, which is an all-time record low for the rial. On Tuesday, the rial was quoted at 41,000 to the dollar.

In recent months, the central bank has raised the official rate gradually to shrink the gap between the two. It has said it wants to unify the exchange rate to make the economy more efficient and create a level field for private firms competing with state institutions with access to cheaper foreign exchange.

Referring to the proposal, Saeedi maintained that banks’ foray into the open currency market would be positive and could be a prologue for rate unification, but the first thing that must be considered is its implementation and results.

The entry of banking system into the currency market would entail changes for moneychangers.

The TCCIM official notes that this does not mean that they would be removed from the scene altogether, “but the banking system would supplant the bureaux de change to a certain degree”.

Saeedi stressed the importance of implementing the proposal, saying the banking system needs to act fast and maintain flexibility because “the way this plan is implemented will determine its extent of influence”.

A meeting was held at the Ministry of Economic Affairs and Finance to address the recent volatility in the currency market.

Officials with the ministry and the central bank, namely the treasury deputy, Rahmatollah Akrami, and CBI Vice Governor Akbar Komijani, attended the meeting to discuss market conditions and what to do next.

 Rate Moderation

Mohsen Bahrami Arz-Aqdas, the head of Trade Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture, said the rial will soon regain ground.

“Considering the formal stance of the government on the issue, forex rates will come down very soon,” he  also told ILNA.

Bahrami pointed to recent remarks made by government spokesman, Mohammad Baqer Nobakht, who had stressed that current fluctuations in the currency market are only temporary and a result of higher market demand.

“The current high rate of currencies in the market stems from various reasons, including Christmas travels,” he said. “The [upcoming] change in administration in the US has also impacted the dollar rates.”

The official noted that the election of Donald Trump to the White House has created doubts about Iran’s nuclear accord and “when these issues are resolved, the greenback’s rate against the rial will come down again”.

“In order for the rates to fall in the acceptable domain, the dual foreign exchange rate system must be abolished,” he said, without elaborating on the acceptable domain.

Bahrami claimed that in view of ongoing discussions in the parliament and the private sector, currency exchange rates will be moderated soon, though “prerequisites are needed for rate unification, a part of which is out of the government’s control”.  

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Just now, screwball said:

Referring to the proposal, Saeedi maintained that banks’ foray into the open currency market would be positive and could be a prologue for rate unification, but the first thing that must be considered is its implementation and results.

 

1 minute ago, screwball said:

Mohsen Bahrami Arz-Aqdas, the head of Trade Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture, said the rial will soon regain ground.

 

1 minute ago, screwball said:

Considering the formal stance of the government on the issue, forex rates will come down very soon,” he  also told ILNA.

Yeah baby...

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Rafsanjani: World business community keen on investment in Iran

Tehran, Dec 28, IRNA - Chairman of the Expediency Council Akbar Hashemi Rafsanjani said on Wednesday that the world business community is keen on economic cooperation and investment in the Islamic Republic of Iran.

 
82365648-71284859.jpg

Speaking for officials of Azad university, he said G5+1 promised to pave the path for Iran's active presence among seven big countries of the world. 
1430**1416

 

 
 
Contact Editor-in-chief: mail32.png newsroom@irna.ir 
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Back in April, Bahmani said the shift from dropping three zeros to dropping four would give the rial parity with the US dollar. Right now, $1 equals about 10,500 rials. By shifting the decimal point four digits to the left, one dollar will cost 1.05 rials.

If the rial indeed is configured to be close to a dollar, Iran will likely resurrect the dinar. The rial is officially divided into 100 dinars, but the dinar is now a relic recalled only by the very aged. The dinar effectively died with the gross inflation of World War II.

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The Central Bank of Iran has announced that it will hand a list of people who traded large amounts of foreign exchange in recent weeks to Iran National Tax Administration for further investigation.

“Investigations will address both direct and indirect involvement in the deals,” said Farshad Heidari, CBI’s deputy governor for banking supervision, without elaborating further.

The official added that the central bank has already sent a list of unruly foreign exchange operators to the law enforcement forces to pursue legal charges against them, CBI’s website reported late Wednesday.

Heidari noted that the move will reward law-abiding moneychangers.

Following the US dollar’s rally against the rial in recent weeks, the move is in line with CBI’s measures against forex market speculations, which the regulator has partly blamed for the dollar’s recent rise against the rial.

The US currency has recorded a significant growth against the rial in the past 30 days, with the latter reportedly losing 17% of its value against the greenback. The rial was quoted at 40,400 rials to the dollar on Thursday in the open market, the Association of Bureaux de Change Operators of Iran announced.

The central bank has repeatedly announced that rial’s weakening is temporary, mostly caused by speculation. Higher demand for overseas trips and the growth in Emirati dirham’s rate [important for Iranian importers] are mentioned as other contributing factors.

As per the law, moneychangers who purchase, sell or transfer currency without obtaining a license from the central bank are operating illegally and their actions constitute currency smuggling.

About 400 exchangers have been registered at CBI and received a license.

Regulations also require licensed moneychangers to keep a record of their daily operations in the SANA system. The system is developed by the Central Bank of Iran, mainly for supervising rates in the forex market.

SANA also announces the average daily rates of traded foreign currencies. The rate is usually lower than the real rate in the market. The highest rate recorded in the system is 41,142 rials to $1 for December 27, whereas the currency was at 41,500-41,800 rials to the dollar in the market.

Commenting on CBI’s recent attempts to revive the banks’ role in the forex market, Heidari said, “Recent improvements in the banking system would allow lenders to offer a wider range of forex services and meet businesses’ need for forex resources.”

Last week, CBI informed businesses to approach the banking system for purchasing foreign currency, noting that banks have been permitted to exchange foreign currencies at the market rate since July.

The operations of banks in the forex market would help prevent fluctuations, said the central banker.

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The end of the current Iranian year in March will bring about an end to currency fluctuations plaguing the market, as increased supply helps moderate the market, predicts the director of the Central Bank of Iran's Exports Department.

"We forecast that currency fluctuations in the market will be curbed by the yearend. Considering the rise in supply from the central bank and from non-oil exports, especially major petrochemical companies, fluctuations will be controlled and the downward trend in exchange rates will continue as it happened in previous years," ILNA also quoted Samad Karimi as saying.

Referring to past experiences, he said currency rates peak in the Iranian month of Dey (Dec. 21-Jan. 19) and this year will be no different.

"But business demand goes up dramatically at the end of December and businesses settle their accounts during this time, which will stoke demand and hence forex rate swings," he added.

The US dollar has gained significantly against the Iranian rial during the past weeks, with the dollar parity rate crossing the 40,000-rial threshold last week. The greenback was quoted for 41,000 rials in the free market on Wednesday, but lost some ground the following day as the rial strengthens to 40,400 per dollar.

The rial's small rally, which began on Wednesday, is the first sign that the currency market is regaining some degree of stability.   

Karimi said the central bank and its Export Department in particular endeavor to support real demand, but noted that while unofficial trade, contraband goods and currency smuggling have declined in recent time, "they still heavily influence currency rates".

The CBI official pointed out that the high volume of smuggling can fuel demand for foreign currency, producing adverse effects.

If the central bank and other relevant official bodies focus on curbing the influence of illegal trade, he added, currency fluctuations will not recur.

According to Karimi, the greenback's strengthening at the global level, a rise in precautionary demand for foreign currency, a hike in speculative activities, the conversion of assets into foreign currency, new demand and smuggling of contraband and currency, paired with an increase in business demand, have contributed to the currency market unease.

On measures undertaken so far, Karimi said the central bank has managed market expectations and increased supply in the interbank and unofficial currency markets.

CBI is also selling currency to banks, "meaning that the banks can purchase from us in the interbank market at open market rates".

Unification of Rates

The central bank official also commented on the much-touted plan to unify the foreign exchange rates.

"Rate unification will be accomplished when the gap between the official and market rates is no more than 2%, but there are certain requirements and the central bank's assets must turn into liquid," he said.

Iran operates two exchange rates—a free market rate and an official rate used for some state transactions—set by the central bank at around 32,376 rials on Thursday.

In recent months, the central bank has raised the official rate gradually to reduce the gap between the two. It wants to unify the exchange rate, make the economy more efficient and create a level field for private firms competing with state institutions with access to cheaper foreign exchange.

The CBI official said non-oil exporters, specifically petrochemical exporters, help moderate the market by supplying currency and are an integral part of the market.

Karimi concluded by declaring that the central bank will increase forex supply in the official and unofficial markets until the end of the year, "meaning that by supporting the market and reducing demand, fluctuations will also die down, which will help balance the market".

 

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