Iranian Rial

[pokerplayer]

This is huge !! They will gain major allies over this one !!

pp

[tigergorzow]

SB,  Yup it is getting very interesting now replacing the dollar for the Euro as it relates to banking transactions between Iran & the EU.  I'm certain the EU is gloating on this agreement with Iran.   The final outcome will be telling.....

[sandfly]

Thanks pp

[Freedomwish]

5 hours ago, screwball said:

Euro replacing dollar in Iran's banking transactions

News ID: 3903875 - Sat 11 February 2017 - 15:26

Economy

TEHRAN, Feb. 11 (MNA) – Trump’s arrival has shed doubts on international ties of Iranian banks who are now after replacing dollar with euro or local currencies in financial transactions in bid to counter banking sanctions.

HOOOOOOOOOLY CRAP!! 

I TAKE A BREAK FROM MY ROUTINE WHISKEY DRINKING AND THREAD READING, AND COME BACK TO SEE THIS?!!  THIS IS INDEED FREAKING HUGE!! 

[Freedomwish]

On 2/10/2017 at 4:53 PM, screwball said:

No war....you believe too much hype and news bs

I stand corrected brother Screwball, too much hype and news bs to drive someone crazy 

[Freedomwish]

On 2/10/2017 at 9:47 PM, pokerplayer said:

No worries, we are all in this together,

pp

[screwball]

2 hours ago, Freedomwish said:

I stand corrected brother Screwball, too much hype and news bs to drive someone crazy 

Just need to remain focused on our goal...

[screwball]

The Leader of Islamic Revolution stressed that trade deals reached between Tehran and European states after last year's enforcement of the 2015 nuclear accord need to be fully implemented.

In a Saturday meeting with visiting Swedish Prime Minister Stefan Lofven, Ayatollah Seyyed Ali Khamenei pointed to frequent visits made by European delegations since January 2016, when the landmark accord became effective and said agreements should not remain "on paper", according to the Leader's official website.

The remaining US bans and Washington's uncooperative approach toward the nuclear deal have impeded Iran's efforts to reap the full benefits of the sanctions relief offered under the agreement to revitalize its economy.

Ayatollah Khamenei said Tehran welcomes expansion of relations with Stockholm in all fields. The top Swedish official described his visit to Tehran as "significant" and "historic", adding that his talks with Iranian authorities have produced "positive" results.

[screwball]

Iran’s president said the European Union is counted upon to support European firms and banks willing to work with Tehran, assuring them there will be no negative consequences.  

Hassan Rouhani added that such encouragement is required to let Iran and Europe fully exploit opportunities emerging after the removal of international sanctions against Iran in January 2016. 

Rouhani was speaking in a press conference with visiting Swedish Prime Minister Stefan Lofven on Saturday, President.ir reported.  

The sanctions were lifted when Iran’s July 2015 nuclear deal with world powers went into effect, under which Tehran committed to temporarily limit its nuclear program.    

Although Europe’s industrial powers have shown great enthusiasm for closer trade ties with Iran since then, the remaining unilateral US sanctions, whose language is vague and levy hefty fines on violators, have frightened European companies. 

The bigger concern for European businesses is the new US President Donald Trump who has vowed to take a tough line against Iran.

Rouhani and Lofven also discussed West Asian conflicts, particularly the situation in Afghanistan, Syria, Iraq, Yemen and Palestine.

The Iranian president said Tehran and Stockholm are intent on developing bilateral ties and working on easing tensions in the region and improving international peace and stability.

Lofven said the level of his accompanying delegation, which comprises top Swedish entrepreneurs, business people and officials, shows how much importance Stockholm attaches to Tehran ties.

Earlier, Iranian and Swedish officials signed five documents of cooperation in various areas, in the presence of the two leaders. 

The documents covered areas of innovation and technology, higher education and research, road construction, communications and information technology, as well as family and women's affairs.

Lofven is in Iran on a three-day visit. He was expected to meet Iranian Parliament Speaker Ali Larijani on Saturday evening.

An Iran-Sweden Business Forum was expected to be held during the visit, covering areas such as automotives, packaging, communications and information technology, materials technology, banking and investment.

The two countries held a joint business forum in June 2016, which was attended by Iranian Foreign Minister Mohammad Javad Zarif and Swedish Minister for EU Affairs and Trade Ann Linde.

[screwball]

The head of Iran Chamber of Commerce, Industries, Mining and Trade has advised the governments of both Iran and Sweden to focus on improving banking ties to further develop economic ties.

"At present, improving banking cooperation between the two countries and removing hurdles in financial and banking matters are necessary and vital to develop economic and trade ties," Gholamhossein Shafiei was also quoted as saying by the official news website of ICCIMA.

Improving banking ties, he added, must be put on the agenda of both governments.

The official was speaking at an Iran-Sweden trade meeting, attended by Swedish Minister for European Union Affairs and Trade Ann Linde and the head of Sweden Trade Council, Ilva Berry. 

The Swedish officials were in Tehran on Saturday as part of a high-ranking political and economic delegation led by Swedish Premier Stefan Lofven on a three-day visit.

Lofven met with President Hassan Rouhani in a separate meeting, in which the president said the European Union should buttress the bloc's banking relations with Iran so as to optimize the opportunities provided by the 2015 nuclear accord.

The Iranian president also said the country favors better banking transactions with Sweden.

In his meeting with the Swedish economic delegation, Shafiei spoke of the potential of bilateral cooperation in various sectors such as infrastructure, auto manufacturing, energy, environment, food and agriculture and mining among others. 

The fast growth of trade deals between the two countries during the past year and a half, decrease in the risk of trading with Iran by the Export Guarantee Fund of Sweden and opening of a Swedish trade office in Tehran "must be looked upon as a sign of the beginning of serious collaborations between Swedish and Iranian companies", he said. 

Shafiei noted that the healthy level of past cooperation can therefore be revived, by focusing on "attracting investments and transferring knowhow and technology".

[screwball]

The head of Iran Chamber of Commerce, Industries, Mining and Trade has advised the governments of both Iran and Sweden to focus on improving banking ties to further develop economic ties.

"At present, improving banking cooperation between the two countries and removing hurdles in financial and banking matters are necessary and vital to develop economic and trade ties," Gholamhossein Shafiei was also quoted as saying by the official news website of ICCIMA.

Improving banking ties, he added, must be put on the agenda of both governments.

The official was speaking at an Iran-Sweden trade meeting, attended by Swedish Minister for European Union Affairs and Trade Ann Linde and the head of Sweden Trade Council, Ilva Berry. 

The Swedish officials were in Tehran on Saturday as part of a high-ranking political and economic delegation led by Swedish Premier Stefan Lofven on a three-day visit.

Lofven met with President Hassan Rouhani in a separate meeting, in which the president said the European Union should buttress the bloc's banking relations with Iran so as to optimize the opportunities provided by the 2015 nuclear accord.

The Iranian president also said the country favors better banking transactions with Sweden.

In his meeting with the Swedish economic delegation, Shafiei spoke of the potential of bilateral cooperation in various sectors such as infrastructure, auto manufacturing, energy, environment, food and agriculture and mining among others. 

The fast growth of trade deals between the two countries during the past year and a half, decrease in the risk of trading with Iran by the Export Guarantee Fund of Sweden and opening of a Swedish trade office in Tehran "must be looked upon as a sign of the beginning of serious collaborations between Swedish and Iranian companies", he said. 

Shafiei noted that the healthy level of past cooperation can therefore be revived, by focusing on "attracting investments and transferring knowhow and technology".

[Freedomwish]

5 minutes ago, screwball said:

Just need to remain focused on our goal...

yes sirrrrrr, indeed! 

[screwball]

Tehran has set its sights on raising crude oil export to Europe in 2017 as the number of customers willing to buy from Iran is on the rise, head of the National Iranian Oil Company said.

"The NIOC has increased exports to European customers to 700,000 barrels per day. However, we plan to increase it to the pre-sanctions peak of 800,000 bpd," Ali Kardor was quoted as saying by Tasnim News Agency on Saturday.

According to the official, European companies, including Russia's Lukoil, Spanish refiner Cepsa, Royal Dutch Shell, Hungary’s MOL and Turkey's Tupras now import more than 700,000 bpd of Iranian oil combined. 

Iran used to sell 800,000 bpd to European refiners in Italy, Spain, Greece, Romania, France, the Netherlands and Poland in the pre-sanctions period, according to Kardor.

"Oil shipments to Lukoil, Cepsa, Italy's Saras and Greece's largest refiner Hellenic Petroleum are underway and more oil export deals are to be finalized with European buyers in 2017," he noted.

Once the second-biggest producer of the Organization of Petroleum Exporting Countries, Iran slipped to fifth place under the international sanctions regime. It is now third behind Saudi Arabia and Iraq which produce around 10 million bpd and 4.5 million bpd respectively. The lion's share of exports during the sanctions was made to a handful of countries including India, Turkey and South Korea under temporary exemptions, while Europe-bound shipments came to a standstill.

The government says it has plans to step up crude production from around 4 million at present to 5.7 million bpd within five years, including 1 million barrels of gas condensates.

"We are keen on expanding our presence in the international market and speeding up negotiations with foreign oil companies," said the NIOC chief.

  NITC Revival

Sirous Kianersi, the chief executive of National Iranian Tanker Company, said last month that the easing of international sanctions gave a new lease of life to NITC's tanker movements which were significantly curtailed when economic and trade restrictions were tightened in 2012.

"Issues pertaining to global insurance, classification, flag requirements and certifications for Iranian tankers have been removed," he said.

According to reports, a NITC-owned tanker that was leased to a major Spanish company recently docked at the country's Port of Algeciras, marking the first time that a vessel owned by NITC docked at a terminal in Europe following the lifting of sanctions a year ago.

Sources also say that two NITC-owned very large crude carriers are headed toward the Dutch port of Rotterdam last month to offload 4 million barrels of Iranian crude.

In 2012, the EU banned imports of Iranian crude by its member countries and also the provision of EU-linked insurance, including protection and indemnity cover for any shipments of Iranian crude, regardless of destination.

 Despite the easing of sanctions, NITC tankers reportedly faced restrictions in berthing at European oil terminals until recently and foreign vessels carried Iran's crude to Europe.

During the sanctions, 90% of Iran's oil, or almost 1 million barrels per day, were shipped by Iranian tankers.

[screwball]

1. National

Sunday, February 12, 2017

Mogherini Says US Committed to Full Implementation of Nuclear Agreement 

 

The European Union foreign policy chief, Federica Mogherini, said on Friday she was reassured during meetings with US President Donald Trump's administration that it was committed to the full implementation of the Iran nuclear deal.

In her first visit to Washington since Trump took power, Mogherini came to present the European Union as a valuable friend to the US with common priorities, Reuters reported.

Mogherini, who met this week with Secretary of State Rex Tillerson, National Security Advisor Michael Flynn, Trump's advisor and son-in-law Jared Kushner and members of US Congress, said her main intention in Washington was to discuss the nuclear accord, which granted Iran sanctions relief in return for curbs on its nuclear program. Her visit suggests concerns among European and other countries, including Russia and China, that the Trump administration may withdraw from the 2015 nuclear deal.

"I was reassured by what I heard in the meetings on the intention to stick to the full implementation of the agreement," Mogherini told reporters.

[screwball]

Central Bank of Iran's Governor Valiollah Seif is expected to discuss an earlier agreement between Tehran and Baku on opening settlement accounts with his Azerbaijani colleagues in Baku, an Iranian diplomat said.

In an interview with Trend News Agency, Iranian Ambassador to Azerbaijan Javad Jahangirzadeh said talks on settlement accounts have not produced any outcome yet, hoping that the upcoming visit would help advance the talks. 

Seif is slated to arrive in Baku on Feb. 12 to discuss financial cooperation between the two countries. Last August, Iranian President Hassan Rouhani visited Baku where the two sides agreed to expand financial cooperation and signed several documents.

During the visit, Valiollah Seif, who accompanied the president, said the central banks of the two countries have agreed to open settlement accounts.

[screwball]

After the banking system, insurance companies are next in line to conform their financial statements to International Financial Reporting Standards, with Iran Insurance Company leading the way.

"The company has established the preliminary requirements for adopting IFRS," IIC's CEO Mohsen Pourkiani told ILNA.

"IIC is also moving toward publishing its new financial reports in accordance with IFRS and has made early preparations."

Pourkiani said the effects of the implementation of new standards on the company's financial statements will soon become known. 

All banks, credit institutions and insurance companies registered with the Stocks and Exchange Organization, whose financial period starts from the beginning of the current fiscal year(March 20) or later, have been obligated to draft their annual financial statements in accordance with IFRS. 

IFRS are a single set of accounting standards, developed and maintained by the International Accounting Standards Board for application on a globally consistent basis—by developed, emerging and developing economies.

These standards help provide investors and other users of financial statements with the ability to compare the financial performance of publicly listed companies on a like-for-like basis with their international peers.

Separation of Life Insurance 

Seyyed Rasoul Tajdar, the chief executive of Alborz Insurance Company, believes that the category of life insurance must be separated from other categories for the sector to flourish. 

"The model of oversight on the reserves of life insurances is of paramount importance and therefore separating the category of life insurance from other categories is a good move," Tajdar said in a talk with IBENA.

The official said the insurance companies of only a few countries engage in general insurance activities.

Middle East Life Insurance Company, affiliated with the privately-owned Middle East Bank, was the first specialized Iranian insurance firm launched this week.

Middle East became operational with an initial capital of 1.2 trillion rials ($37.9 million), aiming to “promote life insurance by offering innovative and attractive insurance products”.

Last month, the Central Insurance of Iran announced that a number of insurance firms have proposed spinning off their life insurance operations into separate entities. It was also announced earlier that the regulator will issue no new license for general firms. 

Abdolnasser Hemmati, the head of CII, had also recently emphasized the importance of the separation of life insurance from other categories, saying that should any insurance companies wish to expand their activities in life insurance, they are welcome to establish a specialized company as a subset.

The chairman of Parsian Insurance Company has also commented on Hemmati's remarks, stressing the importance of the issue.

"Following the measures approved in the parliament in line with increasing the share of life insurance in the sixth five-year development plan, this category is very important and has the potential to be developed extensively," Kourosh Parvizian said.

"Life insurance is a category that is currently ripe for a wide entry of insurance companies and they can increase their profitability very much," he added.

The official, who is also the CEO of Bank Parsian, also drew attention to another comment made by Hemmati who had said the mathematical reserves of the life insurance sector must not be spent to make up for losses in other categories.

Mathematical reserves are assets that a life insurance company must set aside and capitalize to meet its commitments to the insured.  

Noting that the behavior of insurance companies in tapping into their mathematical reserves to make up for losses suffered by other insurance categories is consequential, Parvizian said insurance companies must "focus on ways to make the insurance sector profitable across varying categories".

[screwball]

 

Maziar Motamedi

.

.

Finance Desk

Empowering the Iranian banking system in terms of lending, capital buffer and bad debt recovery took center-stage at the latest major economic conference focused on investment and financing, which was attended by the country's top officials.

Government Spokesman Mohammad Baqer Nobakht announced at the Eighth Conference on Development of Investment and Financing System in Iran on Sunday that in order to increase the lending power of the banking system, public-sector banks in particular, President Hassan Rouhani's administration will take action using two sources.

"[The government] will issue 700 trillion rials ($18.2 billion) worth of bonds to repay its debt to banks and the private sector," he said. 

Nobakht pointed to articles 35 and 36 of the budget amendment law, which allows recapitalization of public-sector banks from revaluation of foreign exchange assets as the secondary source.

There have been many contradictory figures regarding the amount of government debts to the banking sector, but according to the official who also heads the Planning and Budget Organization, the amount stood at 380 trillion rials ($9.9 billion) four years ago while it has now reached 420 trillion rials ($10.9 billion) to 45 trillion rials ($1.17 billion).

"The astronomical figures that are being reported are not the real numbers," Nobakht said, stressing that the government will abide by and act on figures approved by the Audit Organization of Iran.

The government spokesman further announced that 700 trillion rials will be spent to clear the government's dues to eight public-sector banks.

"Up to 150 trillion rials ($ 3.9 billion) will be allocated in the form of bonds to repay government debts to private contractors," he added.

Nobakht said small- and medium-sized enterprises have so far received 148 trillion rials ($3.85 billion) of the 160 trillion rials ($ 4.17 billion) earmarked for them.

According to the official, when the administration took office nearly four years ago, 2,047 major construction projects, along with subsidiary projects, were incomplete.

"A portion of these projects are being finalized," he said, noting that the government also welcomes outsourcing the projects as it has already done in the case of 2,532 projects. 

Nobakht said the aforementioned articles of the budget amendment allow the Securities and Exchange Organization to issue 1 quadrillion rials ($26 billion) worth of bonds, which will not be employed until it can prove effective.

Less Bureaucracy to Benefit Investments  

Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh also spoke of steps that must be taken to see projects through successfully while stressing the importance of profitable financing.

"The first step consists of studying the projects thoroughly and from all aspects before their implementation, which will save money and reduce the completion time of projects," he said, pointing to regulations as the second step.

"In this part, we must ease the legal regime over investments by reducing bureaucracy and regulations."

The minister cited equity, banking loans, foreign finance, foreign investment, bond issuance, individual investments in manufacturing and employing a combination of methods as suitable ways of financing.

He also warned corporate shareholders that they should not engage in executing a project if they do not have at least 30% of the total funds required for the project.

Emphasizing the importance of foreign investment in bankrolling major projects, Nematzadeh announced that $8 billion of foreign investment have so far been officially approved by the Ministry of Economic Affairs and Finance.

For each point garnered through foreign investment, he said, two points are added to the country's economy. 

Focus on Life Insurance

Abdolnasser Hemmati, the head of Central Insurance of Iran, began his speech by comparing the penetration rate of life and other insurance categories in Iran and the world.

"The average penetration rate of insurance throughout the world is about 6," Hemmati said, adding that the penetration rate of non-life insurance in the world is 2.7 while in Iran, it stands at 1.8% "which shows that in the category of non-life insurance, we are not far behind from the rest of the world".

In contrast, he said life insurance registers the highest penetration ratios with an average of 3.8% globally while the same figure is a dismal 0.25% for Iran.

Hemmati noted that the High Council of Insurance Industry has been obligated as part of the sixth five-year development plan (2017-22) to increase the share of life insurance from premium incomes to 50%, "a move which is deemed impossible by some".

That is while, he adds, life insurance grew by 40% during the initial 10 months of the current fiscal year (March 20-Jan. 19) and other categories grew by "about 20%".

[screwball]

After a meeting with the Swedish Minister for European Affairs and Trade Anne Linde, Iran's Minister of Communications and Information Technology Mahmoud Vaezi announced that two Swedish banks will allocate credit lines to Iranian companies in the field of communications and information technology. 

"Our trade volume witnessed a leap last year to reach €250 million and this process will continue in the technology development sector," Vaezi was also quoted as saying by Banker.ir.

Vaezi noted that the Swedish economic delegation's trip to Tehran was a response to US President Donald Trump's enforcement of travel bans and the more Trump insists on his stances, the more the US will become isolated.

"JCPOA [the formal name of Iran's nuclear deal with world powers] is an international agreement and it is not possible for any country to violate it," he concluded.

The visiting delegates were in Tehran on Saturday as part of a high-ranking political and economic mission led by Swedish Premier Stefan Lofven on a three-day visit.

The delegation included CEOs of companies like Scania, Ericsson, Elekta, Volvo, ABB, Sensys Gatso Group, Swedish Energy Agency, Swedish Environmental Protection Agency and Swedish Post and Telecom Authority, along with Danske Bank and EKN (Swedish export credit agency.) 

Lofven met with President Hassan Rouhani on Saturday, wherein the president said the European Union should buttress the bloc's banking relations with Iran to optimize the opportunities provided by the 2015 nuclear accord.

Back in 2003 and 2004, Iran was the 21st and 28th exporter to Sweden respectively, though in 2005, it was not among the top 30 exporters to this Scandinavian country.

During the years when sanctions blocked Iran's foreign relations, trade with Sweden shrunk to 25% of what it used to be, dropping from $1.1 billion to $282 million.   

[screwball]

International credit cards, namely Visa and MasterCard, were slated to enter Iran, but they didn’t. 

The imposition of nuclear sanctions against Iran had made the official sales of these cards illegal. The year 2013 was the last year a couple of banks issued international prepaid credit cards in Iran officially. 

Nevertheless, some companies continue to issue Visa and MasterCard and sell them multiple times their real value. 

“These companies take ridiculously high commissions on their sales. For example, a 100-dollar card is sold at $118,” Iman Eslamian, a banking expert, said. 

The term “sanctions exploiter” would apply to these companies, according to a report by the Persian daily Shahrvand. 

Visa and MasterCard have networks that process payments between banks and merchants for purchases made with the cards. 

“But these cards are neither legally nor directly available in Iran. They cannot be reloaded either. For a short period, Iran tried to connect to these networks indirectly through an intermediary Georgian bank. Getting wind of the news, the US browbeat the Georgian bank and other banks that intended to strike such deals with Iran,” he said.

“As we speak, a reputable Japanese bank has facilitated banking relations between Iran and other countries,” Eslamian says. 

Some of the prepaid credit cards issued by unofficial companies in Iran are counterfeit, the report adds. 

“I cannot carry out online transactions using the card I bought,” says an interviewee while another said he bought a $100 card, only to see it was worth $97. 

In August, Minister of Communications and Information Technology Mahmoud Vaezi announced that with the removal of financial and banking sanctions, MasterCard services would be made accessible by Iran Post Company. 

The news quickly made headlines around the world, but MasterCard denied any activity or cooperation with Iran. 

“MasterCard does not have any activities in Iran, as sanctions remain in place for US-based companies for some time,” said the company’s spokesman, Seth Eisen.

Later, Vaezi clarified the misunderstanding related to the activity, or lack thereof, of US-based multinational financial services corporation MasterCard in Iran. 

“What we announced was that the removal of sanctions has started a new phase of international cooperation in various communications fields, and due to this opportunity, Iran Post Company has signed a deal with an intermediary firm that offers international prepaid credit cards to Iranians,” he said.

“At that time, we did not mention MasterCard at all, but some media assumed that the services will be provided by MasterCard.”

Vaezi explained that the company, which offers international credit card services, is active in Iran under the name “Vision Card”, adding that MasterCard’s announcement that it had no activities in Iran was correct. 

This comes as Iran Post Company has not signed any agreement with international credit card companies and only acts as an intermediary for some companies. 

According to the company’s PR office, issuance of such cards depends on the Central Bank of Iran’s credit license.

“Had the CBI acted more swiftly on the international stage, legal problems associated with prepaid credit cards would have been fixed by now,” Eslamian said.  

Was to be implemented after march 21 2017

[screwball]

Budget deficit is taking its toll on Iran’s infrastructure development, leading to underinvestment and worsening recession in industries.

Figures published by the Central Bank of Iran show the budget earmarked for the development sector has never been fully allocated in the past few years, as the government failed to materialize the revenues it predicted.

“The main reason for the government’s failure in providing resources for development is that it fails to achieve its target revenues,” Mohammad Taqi Fayyazi, the head of Budget Team at Majlis Research Center, told the Persian weekly Tejarat-e Farda.

“Only 1.44 quadrillion rials ($37.4 billion) of the 1.96 quadrillion rials ($50.9 billion) in projected revenues were materialized in the eight months of the current Iranian year (March 20-November 20),” he said, stressing that logically, spending should keep pace with revenues.

The government was supposed to earmark 387 trillion rials ($10 billion) to development projects in the eight-month period, whereas only 39% of this amount have been injected in these projects.

This, in fact, has been the case during the past three years, as the government only met 58%, 68% and 39% of its projected development spending during March 2015-16, March 2014-15 and March 2013-14 respectively.

“Resources are allocated based on priorities. And the priorities include salaries and wages of state employees and buying back issued bonds and paying their interests … What little remains goes to development projects,” Fayyazi said.

A 10.85 quadrillion-rial ($280.6 billion) budget bill was proposed by President Hassan Rouhani early December. 

Government companies, banks and profit organizations will get 7.56 quadrillion rials ($195.5 billion) to finance their operations, up from 6.83 quadrillion rials ($176.6 billion) last year.

The government owns the majority stake in Iran’s economy, bringing about low productivity and high costs. More than two-thirds of the revenues projected for next year are extended for the expenses of ministries and their affiliated companies and organizations. And the administration is unable to reduce most of this.

“Every budget bill has fixed and flexible parts,” Fayyazi said. “A smaller and more agile government means the inevitable section of the budget, including salaries and costs, is small and the flexible part is larger.”

In the next year’s budget bill, 511 trillion rials ($13.2 billion) are associated with the revenues of ministries and state institutions while 3.2 quadrillion rials ($82.7 billion) are placed under “public resources”, which include government expenditures. The two categories combined have seen a 10.6% rise compared to the current year’s budget.

The government recorded 430 trillion rials ($11 billion) in budget deficit for the first half of the current Iranian year. The gap between revenues and spending is expected to widen this year, compared to $13 billion in all of last fiscal year.

The government has projected a stronger US dollar and a higher price for crude oil in the March 2017-18 budget bill. It set the greenback’s exchange rate at 33,000 rials, up from last year’s 29,970 rials, and still far lower than the 38,490-rial/dollar in Tehran’s markets on Sunday. 

OPEC’s third largest crude oil exporter is assuming an average oil price of $50 a barrel, up from the $40 used in the current year’s budget. Iran and other oil-producing countries recently agreed to limit production to drive up prices. 

Taxes are projected to rise 1,130 trillion rials, up from last year’s 1,010 trillion rials. And with the $50 crude and 33,000-rial rate for the US dollar, the administration expects 1,100 trillion rials from oil exports, including the export of natural gas and condensates. 

Oil prices fell drastically in 2014, from over $100 per barrel to below $30 record low in 2016, squeezing Iran’s hydrocarbon-dependent revenues. The Islamic Republic had enjoyed sky-high crude prices for a few years, adjusting its spending with abundant revenues. But this became a challenge when prices nosedived.

Fayyazi said Iran’s budget faced problems following the reduction in oil price and shrinking crude exports as a result of sanctions (imposed over Iran’s nuclear program).

“This is while lowering the costs at that point was impossible. The only way out was to cut the resources allotted to the infrastructure sector,” he said.

Development spending in the next budget, which is estimated at 620 trillion rials ($15.5 billion), is 9% more compared to the current year’s budget, which is highly unlikely to be realized by the end of the year.

Low infrastructure spending compounds the lingering recession in Iran’s construction sector. For years, steel, cement and other construction industries have suffered a prolonged slowdown resulting from a drop in demand.

“Some 75% of Iran’s development budget are associated with construction,” Fayyazi said. “If the development resources are allocated, the construction sector will thrive.”

The lawmaker noted that due to limited cash, the government has failed to pay its liabilities to contractors whose influence on the economy has been shrinking in the past few years.

The total value of overdue payments to contractors by ministries, including the Ministry of Energy, has been unofficially estimated at up to $35 billion.

The parliament has approved the repayment of 400 trillion rials (more than $10 billion) of government debt in the current fiscal year (March 2016-17).

Most of the debt is due to a large number of unfinished infrastructure projects, the completion of which requires $40 billion. Almost half of the next year’s development budget ($7.5 billion) will be used to complete 2,700 unfinished projects.

[screwball]

Kish Airlines is planning to buy four short-range planes by the end of the current Iranian year (March 20), according to CEO of the Iranian company.

“At present, 20 Iranian provinces have direct flights to and from Kish,” Mohammad Taqi Jadidi was also quoted as saying by ILNA.

Kish Airlines operates from Iran’s southern tourist hub and free trade zone of Kish Island. 

Apart from domestic flights, it also operates international and charter services. The airline was established in 1989.

[screwball]

2017

Reform Plan Reduces Health Care Costs 

 

The reform plan has reduced the cost of health care by 30% since its implementation in 2013, an Iranian parliamentarian said.

Ahmad Hemmati believes investment in medical equipment and the rise in the number of hospital beds are the main achievements of the Health Ministry, Dolat.ir reported. 

According to Rasoul Dinarvand, the head of Food and Drug Organization, the government has also managed to save up to $500 million over the past three years.

The Health Reform Plan was introduced to fulfill President Hassan Rouhani’s election campaign promise of health care for all Iranians by 2018 under a nationwide health insurance program. 

The Health Ministry is also committed to curb the use of harmful foods, promote healthy lifestyles and reduce the huge annual costs that non-communicable diseases impose on the economy.

[screwball]

As per the sixth five-year development plan (2017-22), 30% of government revenues earned from value added tax will be used to shore up small- and medium-sized enterprises, according to the head of Iran’s Small Industries and Industrial Parks Organization, Ali Yazdani. Iran’s development plans outline government strategies in its budget planning for the next five years. The approval of the sixth plan has been delayed by a year. Yazdani noted that SMEs account for 53% of the jobs created and 10% of exports in the industrial sector, IRNA reported. According to Gholamreza Soleymani, the deputy head of the organization, exports by Iranian SMEs during the nine months to December 20 amounted to $1.6 billion.

[screwball]

An agreement between OPEC and non-OPEC producers last year to cut crude supplies has raised Iran's oil revenues by $30 million per day, a deputy oil minister said on Sunday.

"Tehran's daily oil revenues increased $30 million since the Vienna agreement," Amirhossein Zamaninia was quoted as saying by Mehr News Agency.

Members of the Organization of Petroleum Exporting Countries clinched a historic deal in the Austrian capital on Nov. 30 to slash oil production by 1.2 million barrels per day, effective in the first half of this year. The following month, some producers outside the 13-nation bloc joined the pact by promising to add 600,000 bpd to the cuts.

Oil prices have since soared by around 20%, giving oil producers a better economic prospect for the year compared to 2016 when Brent, the international crude benchmark, collapsed to a 13-year lows at $27 per barrel, punishing oil states and companies with severe budget deficits.

Zamaninia said Iran and other OPEC members will continue to discuss the crude market to maintain balance in supply and demand. 

He asserted that Tehran and Riyadh's consensus within the framework of the Vienna agreement to cut back production had helped in rebalancing the market.

"Despite political differences, the two sides negotiated the OPEC deal in line with the collective interest of all members of the organization," the deputy minister said.

Brent traded at $56.63 a barrel on Friday, drawing support from a report by the International Energy Agency that OPEC nations fulfilled 90% of the promised cuts in January.

Under the OPEC accord, Iran is allowed to produce an average of 3.8 million bpd in the first six months of the year. Iran says it is now producing 3.9 million barrels per day of crude oil and condensates.

The Oil Ministry reported at the weekend that Iran's light crude gained 40 cents in the week to Feb. 3 to settle at $53.01 per barrel. The country's heavy crude also traded up 77 cents at $52.07 per barrel in the week. Both crudes have steadily held above $50 since the beginning of the year.

OPEC's basket of thirteen crudes stood at $52.76 a barrel on Thursday, the group's calculations showed on Friday.

[screwball]

9 minutes ago, screwball said:

Nobakht pointed to articles 35 and 36 of the budget amendment law, which allows recapitalization of public-sector banks from revaluation of foreign exchange assets as the secondary source.

There are those words again...