Iranian Rial

[screwball]

Perfect time to remove zeros

[gregp]

I'm having a better feeling towards the Iranian Rial. 

[Freedomwish]

25 minutes ago, gregp said:

I'm having a better feeling towards the Iranian Rial. 

Yup!! 

[tigergorzow]

7 hours ago, climber7 said:

the Iranian government announced it would stop using the U.S. dollar “as its currency of choice in its financial and foreign exchange reports,” the local Financial Tribune reported.

We're revolutionizing the news industry, but we need your help! Click here to get started.

Iran governor Valiollah Seif’s central bank announced the decision in a television interview on January 29. The change will take effect on March 21, and it will impact all official financial and foreign exchange reports.

climber7, Thanks....This is getting very interesting knowing that Iran will no longer deal with the dollar effective 21 Mar.  MY MY MY...

1 hour ago, screwball said:

We are just waiting to see what happens march 21 or two weeks either side, if they are reset financial reports and accounting standards before march 21 then around this date will be exciting...especially if they are dumping usd same day...

SB,  Truly appreciate all of the excellent articles you bring to the DV team.   Our time is nearing for the RV Rial & RV IQD IMHO.

GO RV

[blueskyline]

Simply Invaluable Screwball .....

[screwball]

3 hours ago, gregp said:

I'm having a better feeling towards the Iranian Rial. 

Funny enough so do I....

[screwball]

1. Economy
2. Business And Markets

Sunday, March 12, 2017

IMF: Early Forex Rate Unification Possible in Iran

Since the Iranian government has already done a lot of preparations to adopt a single exchange rate regime, the country is capable of making an early move in this regard

As for addressing the external threats that Iran is facing, the country will have to begin domestic reforms like reducing dependence on oil, strengthening the financial sector and expanding the role of private sector 

Pouya Jabal Ameli

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Economist

Mohammad Affianian

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Finance Desk

The International Monetary Fund is optimistic that Iran can unify its dual foreign exchange rates in 2017-18 despite recent challenges facing the country, such as currency market volatility.

In an interview with Financial Tribune, Catriona Purfield, a senior economist at IMF, said since the Iranian government has already done a lot of preparations to adopt a single exchange rate regime, the country is capable of making an early move in this regard.

 "Half of imports has been put on the market rate and most of the goods are now at the flexible rate. Interbank FX market has been reestablished. Therefore all the elements are there, so an early move is possible," she said.  

Purfield , who led a recent Article IV mission to Iran– an annual health check on the Iranian economy as she puts it, added that in its earlier report, IMF had urged Iran to unify the exchange rates and have "a managed float" to have an early move benefit.

After completing a two-week Article IV consultation with Iran, IMF released its concluding statement on Feb. 27 in which it commended Iran for its "impressive recovery" from recession after the lifting of sanctions in 2016.    

In preparing its report, the Article IV team had policy discussions with the Central Bank of Iran, ministries and agencies, private sector, Chamber of Commerce, NGOs, entrepreneurs, Cooperatives Ministry and social organizations.

"We witnessed a fundamental difference in this year's Iran performance compared to last year ... We're seeing growth in the range of 6.5-6.6%, which is the forecast figure for this year … a huge turnaround  from last year when the economy actually contracted," Purfield said.

According to the economist, if Iran had unified its exchange rates at the time of the oil price crash, it would have had an extra tool to respond to that shock.

"IMF has been strong in its language advocating for an early move to unify the rates and doing it within a year because the dual exchange rates vary by more than 2%," Purfield said.

Asked why IMF did not advise a specific date for the unification, she noted that "we did not advise on an exact timing for unification because at the end, the government has to make sure the FX market is stable and it has good access to international reserves to prevent unexpected spikes in the exchange rate".

Article IV also had discussions with Iranian authorities to have better regulations to control the FX market to have more transparency by moving transactions to the banking sector, having real-time monitoring of foreign exchange within the market and setting up the infrastructure to monitor the market.

"They should come up with regular publication of FX reserves data and that information should be available and we had discussions to have a more transparent framework," she said.

Purfield cautioned that reforming the monetary policy framework and moving away from fixing an exchange rate were contingent upon the market exchange rate being stable and having a good monetary policy and a good grip on inflation.

Growth and Other Aspects

However impressive Iran's economic growth in 2016-17, it cannot be denied that thanks to a surge in oil exports, Iran clawed back its share from the market or as Purfield puts it as an "oil story".

"Oil data show a 52% jump in value-added to the economy  (oil exports nearly doubled this year) and that growth is not seen in the rest of the economy," she said.

"The non-oil sector has been quite weak and we have pointed that in the report and we have been more modest in the growth uptick for 2016/17 than the government."

Purfield noted that IMF is keen that there should be reforms to support growth and to be able to allow the non-oil economy to expand.

The non-oil sector only registered a 0.9% growth in the first half of 2016-17, which was attributed by IMF to difficulties in accessing finance and domestic financial sector, and structural weaknesses.  

"We have been more conservative in our medium-term forecast (4.4%) and the figure for next year's headline growth (3.3%), which will be lower or on the downtrend unless oil prices increase or there is expansion in that sector," she said.

"Otherwise, there's no way that oil can grow again by 52% and that's why we have emphasized growth in the non-oil sector."

Banking Woes

A good part of IMF advice this year focuses on the condition of Iranian banks and the serous struggles they are facing.

As the economist puts it, they urged problem solving in the banking system to safeguard the achievements of financial stability and low inflation.

"Interest rates are now in the 20% range and without inflation that implies a real rate of nearly 10% that is strangling the private sector and the recovery," she said.

Purfield recommends that now that the economy is beginning to recover and external relations are improving, it is time to address the challenges in the banking sector.

"One thing we advised is to handpick distressed banks and put them on enhanced supervisory administration–the very banks which are competing for deposits by offering you some very nice interest rate and that makes interest rates rising fast because other banks try to compete with them," she said.

"Another key advice is to conduct an Asset Quality Review: an independent auditor going into each bank and doing a forensic on each of the bank's balance sheets. So you can get an exact sense of how the problem of non-performing assets is and where the problem is coming from."

The economist stressed that that's when one can determine which of the banks can be saved and which of the banks may not be viable so they can be resolved: merged or closed.

She is also comforted by the fact that the Iranian government has begun to take some of the steps for this by implementing International Financial Reporting Standards, which is the first step for being more transparent.

The two banking laws (the Banking Reform Bill and the Central Bank Bill) will be very helpful, as they will strengthen the tools to deal with the banks and also enhance supervision over them.

The government is seeking IMF technical advice regarding these issues so they can be in line with international standards and the bills will ensure that the banking system gets back into shape again.

As for addressing the external threats that Iran is facing, the economist believes the country will have to begin domestic reforms like reducing dependence on oil, strengthening the financial sector, expanding the role of private sector and reducing the government's role in the economy.

 "Other measures include creating buffers and savings so you have something to draw from when there is a shock," she said.

Precedent shows, Purefield says, that on the whole Iran has been relatively good at taking IMF advice.

Will Iran follow embrace these recommendations too? Here's hoping.

[screwball]

 

Iran Air’s new Airbus A330-200 landed in Tehran's Mehrabad Airport on Saturday 8:57 a.m. On board the plane were deputy minister of roads and urban development, Asghar Fakhrieh-Kashan, and the flag carrier’s CEO Farhad Parvaresh who had officially received the plane in Airbus delivery center in Toulouse, France late Friday.

On the sidelines of a ceremony held after the landing, Fakhrieh-Kashan told reporters that four million Iranians use foreign airlines every year due to the bad condition of Iran’s air fleet.

Parvaresh hoped that with the new delivery and more to come in the near future, Iran Air will be able to provide passengers with better services.

The new A330 is the first wide-body jet from a firm order Iran placed in December 2016 for 100 Airbus aircraft, including 46 single-aisle and 54 wide-body jets.

The deal is worth $18-20 billion based on list prices though Parvaresh has been quoted as saying that the value of the contract would not exceed $10 billion, considering the number of orders placed and the current market conditions.

The A330 features a two-class cabin layout, seating 32 passengers in business and 206 in economy. It has been referred to as “Iran’s first modern wide-body” plane in local media.

 New Dawn for Iran Air

“The arrival of the first A330-200 heralds a new dawn for Iran Air, as it churns over its aging fleet, but it’s worth remembering that the A330-200 is an aging model and is technologically inferior to the 787, 777 and A350. However, for Iran Air’s immediate needs, it will be a better replacement for the gas guzzling A300s and A310s,” Saj Ahmad, chief analyst at StrategicAero Research, told Financial Tribune.

“The A330-200s will also allow Iran to reinstate some long haul services beyond Europe and deeper into Asia as it looks to build up a bigger international route network.”

According to Airbus, Iran Air has ordered 45 planes from the A330 family which, considering the 54 wide-body jets order, means the number of A350s on the list is down to nine.

In addition to the Airbus deal, Iran Air has also signed a deal to purchase 80 planes from Boeing. The $16.6 billion deal includes 50 of Boeing’s narrow-body 737max 8s, 15 wide-body 777-300ERs and 15 777-9s, which will be delivered to Iran Air over 10 years, according to the website of the Ministry of Roads and Urban Development’s news service.

Uncertainty has been surrounding the implementation of the Boeing deal since Donald Trump was elected as US president. However, the Trump administration's Treasury Department stated on Monday that it would continue to grant licenses to companies such as Boeing so that they can pursue multibillion-dollar deals with Iran, The Washington Free Beacon reported.

 More Efficient Options

“There’s no doubt the A330-200 is a good workhorse, but Iran Air will be keen to get its hands on A350s, 777-300ERs and 777Xs which are far more fuel efficient, cost less to operate and will provide better flexibility,” Ahmad said.

“The A330-200 is technically a previous generation jet and many airlines are standing down their A330s in favor of 787s or A350s.”

Officials are unhappy with the fact that Iran Air, once a frontrunner, has lost its place to regional rivals over the past years.

According to Minister of Roads and Urban Development Abbas Akhoundi, Iranians paid $12 billion for air tickets to international airlines between 2011 and 2014.

“With a revamped fleet, the best way for Iran Air to leverage the demand that is prevalent in the Persian Gulf/PGCC region, [is that] the airline has to explore greater code-share opportunities to help spur inorganic growth and develop traffic too,” Ahmad said.

“These will come over time and it’s unreasonable to expect a tidal wave of change any time soon.”

Another A330 by March 20

Parvaresh said on Saturday that another A300 will be delivered by Friday.

Iran Air was delivered a single-aisle Airbus A321 on January 12.

According to Fakhrieh-Kashan, the carrier is also awaiting the delivery of a few short-haul planes made by the Franco-Italian plane manufacturer ATR by March 20, but those deliveries have been postponed to the first month of the new Iranian year (starting March 21, 2017).

Iran Air has been in talks with ATR for over a year to purchase 20 short-haul aircraft, with the option of adding 20 more in future. This contract is worth $400 million.

"The talks are close to a final contract, but there remain difficulties. Issues regarding after-sales services for Canadian engines of the plane have yet to be resolved," Fakhrieh-Kashan said.

“It’s normal for delays in contractual discussions pertaining to engines since repair and overhaul costs can make the difference between flying an airplane, or writing it off,” Ahmad said.

“Given ATR’s dominance in the regional airplane market, I think a deal will be struck since both Iran Air and ATR want it to happen. It’s very similar to the deal with Boeing and how that has yet to be firmed up. Once the minutiae of the engine element are signed off, the ATR deal is good to go.”

[screwball]

The head of Tehran Chamber of Commerce, Industries, Mines and Agriculture has called for the unification of foreign exchange rates and criticized the current dual rate system.”

A multiple exchange rate regime calls for allocation of subsidies to imports and prepares the ground for rent-seeking and lack of transparency,” Masoud Khansari was also quoted as saying by Financial Tribune during the chamber’s meeting with members of the press.

Khansari referred to foreign exchange as a major issue of the Iranian economy, adding that the chamber has never advocated higher foreign exchange rates.

“We want real exchange rates, whatever they may be, to be regarded as the main criterion for policymaking,” he said.

Makes me laugh they called for unification last year and stated time is ready!

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[tigergorzow]

1 minute ago, screwball said:

1. Economy
2. Business And Markets

Sunday, March 12, 2017

IMF: Early Forex Rate Unification Possible in Iran

SB Thanks,  This article says it all....Something special is about to happen to Iran in regards to their currency IMHO.

[screwball]

President Hassan Rouhani's executive order to transfer all government accounts to the Central Bank of Iran will be completed next year, the director of CBI's Office for Banknote Issuance said.

"All government accounts will be integrated and deposited in CBI in the next fiscal year [starting March 21]," Masoud Rahimi also told IRNA.

All the income and expense accounts of the administration in the banking system will be closed and moved to CBI as per the president's  directive notified to executive bodies on March 6.

The move is line with promoting transparency in government accounts and will be done with the assistance of the Ministry of Economic Affairs and Finance, and the Treasury. 

[screwball]

he Iranian banking system is not bankrupt contrary to some reports and the Central Bank of Iran is in control, the vice governor of CBI said.

“I do not agree with the use of the term bankruptcy for banks,” Akbar Komijani also told IRNA, though conceding that “a number of banks are facing problems such as a shortage of capital and non-performing loans higher than international standards”.

Referring to measures undertaken to address banking woes worsened by years of sanctions and isolation from the international community, Komijani said CBI has studied challenges facing lenders in the past two years with the help of President Hassan Rouhani’s administration and the parliament to come up with “reformative policies”.

The CBI official stressed that bankruptcy of banks is different from that of companies and businesses, and CBI has considered a number of approaches to prevent them from going bankrupt such as structural reforms and mergers.

He added that by conducting expert analyses, the central bank has “complete knowledge” of the condition of Iranian banks and has taken measures to reform them, namely articles 35 and 36 of the amendments to the annual Budget Law for the current fiscal year (started March 20, 2016).

“These two articles allow the government to act in line with recapitalizing state-run banks and a number of private banks from the revaluation of the foreign assets of CBI,” he said.

Komijani noted that this measure will significantly improve the capital adequacy ratio of banks.

Eight state-owned banks, including Bank Keshavarzi and the Export Development Bank of Iran, have already seen or will see their capital increase as part of government actions.

“The Budget Law for the next fiscal year will add Bank Melli, Bank Sepah and Bank Maskan (the agent bank of housing sector) to the list of banks that will experience a rise in their capital,” Komijani said.

Reports that the Iranian banking system is bankrupt has been circulating intermittently for some time, especially during the past few weeks, which could be due to the greater emphasis placed by CBI and the government on banks to conform to International Financial Reporting Standards.

[screwball]

fter days of cold snaps, it was a sunny Wednesday morning at Neauphle-le-Chateau Street in downtown Tehran. The press had gathered at the French Embassy for a briefing on the country’s plans for expanding its presence in Iran.

The fine weather and the morning calm were the perfect metaphor for the French’s positive outlook.  

The importance of Iranian market for France was underscored by Muriel Penicaud, the CEO of Business France, who elaborated on French operations in Iran. Optimism, determination and patience were the main themes.

Founded in January 2015, Business France is a public-private body contributing to meeting three economic targets: helping French businesses expand abroad; aiding employment and development by attracting foreign investors to France; and promoting France’s business image across the world.

“Before anything, we intend to get our trade ties back to pre-sanctions levels,” said Penicaud, who is also France’s Ambassador for International Investment.

“We did not wait for sanctions to completely go away before getting back to Iran. Therefore, we established Business France’s Tehran office in September 2015 to operate as France’s trading arm here.”

Paris opened the first major European trade office in Tehran during the visit of a French delegation led by the Minister of State for Foreign Trade, Tourism and French Nationals Overseas Matthias Fekl and Minister of Agriculture, Food and Forestry and Government Spokesperson Stephane Le Foll.

The Business France office, located at the country’s diplomatic mission in Tehran, seeks to facilitate commercial relations between the two countries.

  300 French Businesses Guided to Iran

Penicaud noted that since January 2016, Business France has held talks with more than 2,000 French firms regarding the Iranian market and helped 300 businesses enter the country.

They are mostly small- and medium-sized enterprises operating in the sectors of mining, agriculture, automotive, aviation, plastic industry and industrial machinery.

“What the embassy reports say and what I have seen personally indicate that France’s business image is quite positive here, as Iranians have used French expertise in auto and aviation sectors as well as health products,” she said.

According to Penicaud, France is currently Iran’s third biggest EU trade partner with bilateral trade amounting to €2.1 billion in 2016, indicating a 235% upsurge compared to 2015.

Iran’s oil exports accounted for the bulk of the figure, with the rest pertaining to French exports to Iran, including auto and plane parts, perfume, cosmetics, chemicals and health products.

  Biggest European Investor in Iran

The French official noted that France ranks first in terms of investments made in Iran compared to other EU countries.

The latest data indicate that French businesses invested €340 million in Iran in 2015, which is yet to reach its all-time high of €1.4 billion in 2002.

Penicaud said it takes about two years for any French company to cement a foothold in Iran, emphasizing that the process of boosting trade to pre-sanctions levels will be lengthy.

“For us, success [in Iran] is made up of three objectives: first is obviously meeting the market demand, second is entering Iran with a win-win mindset, to which end cooperating with local partners is the best way. The third is sealing long-term deals. Reaching these objectives requires patience and determination,” she said.

The Business France CEO also elaborated on the possibilities of boosting Iranian exports to the European Union.

“France, as one of the most attractive countries in the EU in terms of R&D, investment and market access, can be the platform for Iran to enter Europe and Africa and access 500 million consumers,” she said, adding that there are 20,000 foreign companies working in France, but only 20 of them are Iranian.

  Optimism Despite Impediments

Sanctions imposed on Iran over its nuclear energy program were lifted last year, but not all of them. However, most limitations on banking transactions remain in place.

And with a new administration at the White House, the future of Iran’s economic ties with the world is shrouded in uncertainty. The French, however, appeared quite optimistic and believed that France and the EU will strive to bolster ties with Iran.

“We cannot say that the door is open in the post-sanction era, but it is at least half-open. And right now, the number of banks our companies can work with regarding Iran has increased significantly,” she said.

Penicaud noted that the number of EU banks currently working with Iran is 40 and that two of them are French. They are mostly regional banks that abide by EU regulations and are not affected by the United States’ policies. In fact, it is “these channels that have enabled France to have transactions with Iran” so far.

“Obviously, the normalization of banking ties takes time, as it requires lengthy and complex negotiations. We can only hope that the issues will be resolved. But in the short run, the French government is doing its best so that big banks can return to Iran,” she said.

Asked if the French business community is concerned about Iran’s upcoming presidential elections, Penicaud said they are not concerned, rather “they are waiting”.

The French official added that Iranian consumers demand high quality and innovative foreign products, and as such, only the best of the French SMEs can enter Iran.

But the SMEs have concerns of their own, too. The main issue, other than finding the proper partner and getting to know the ropes, is tariffs. According to Penicaud, lack of transparency regarding tariffs and trade regulations makes things complicated and impedes the entry process.

“We usually have three pieces of advice for French SMEs before entering Iran,” she said. “First, things do not work in short term here. Second, any company will need expert market analysts with them to understand the market. Third is to find reliable connections, by for example reaching out to chambers of commerce.”

[screwball]

Time: 18:06|

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Official: Iran Air is to receive four new Airbus-321 planes in upcoming year

Tehran, March 11, IRNA -- Managing Director of national flag-carrier Airline “Iran Air” Farhad Parvaresh said here on Saturday that the third plane of Airbus-330 is to enter the country on March 19 or 20.

 

He announced that according to the contract with Airbus, Iran is to receive four Airbus-321 planes in the upcoming year (Iranian calendar).

Parvaresh made the remarks on the sidelines of arrival ceremony for the second Airbus to Iran.

He said that we are to rebuild our air fleet and are trying to promote qualification of our air services.

[screwball]

 

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Iran approves attraction of $10 billion of foreign investment

Tehran, March 11, IRNA – Head of Tehran Chamber of Commerce, Industries, Mines and Agriculture announced that attraction of $10 billion of foreign investment to the country has been approved.

 

“Attracting over $10 billion of foreign investment by February 20 had been approved,” Massoud Khansari said. 

He said that as a result of visits by the economic and trade delegations, contracts in the fields of pharmaceuticals, auto spare parts, polymers and chemical substances were finalized. 

Khansari pointed to his assessment about the country’s economic status, and said, “This year’s economic conditions have relatively improved as compared to previous year although it has not tangibly shown itself in the society.” 

2050**2050

[screwball]

Five new Airbuses to join Iran fleet by March 2018

1. Economy

March 11, 2017

 

TEHRAN- Iran will receive a new Airbus jetliner on March 19 or 20 and four others in the next Iranian calendar year, ending March 20, 2018, Farhad Parvaresh, the managing director of the Airline of the Islamic Republic of Iran (Iran Air) said on Saturday.

He made the remarks on the sidelines of receiving the second Airbus jet of Iran’s purchased airplanes, Airbus 330, at Tehran’s Mehrabad Airport.

“The third purchased Airbus jet, Airbus 330, will be delivered to Iran on March 19 or 20,” IRNA quoted him as saying.

The first plane, Airbus A321, that Iran purchased from the European aviation giant Airbus, landed in Tehran’s Mehrabad Airport on January 12, 2017.

During a visit by President Hassan Rouhani to Paris in January 2016, Iran ordered 118 Airbus jets worth $27 billion.

HJ/MA/MG

[sandfly]

Thanks sb this would be great for this month. If they would do it 

[screwball]

4 hours ago, sandfly said:

Thanks sb this would be great for this month. If they would do it 

Trust I needed this over 6 months ago....at my age a change in employment would help me with my health issues...

[screwball]

In an interview with Financial Tribune, Catriona Purfield, a senior economist at IMF, said since the Iranian government has already done a lot of preparations to adopt a single exchange rate regime, the country is capable of making an early move in this regard.

 "Half of imports has been put on the market rate and most of the goods are now at the flexible rate. Interbank FX market has been reestablished. Therefore all the elements are there, so an early move is possible," she said.  

[sandfly]

Then let it run, let's see how high it can go

[pokerplayer]

On 2017-02-24 at 6:02 PM, screwball said:

So is banking forum Cbi meeting? What will he announce this time march 1st onwards? Re issue the order or postpone?

So are we still on cue for March 20th ? Sorry been gone for a few weeks and out of the loop.

   pp

[tigergorzow]

5 hours ago, screwball said:

In an interview with Financial Tribune, Catriona Purfield, a senior economist at IMF, said since the Iranian government has already done a lot of preparations to adopt a single exchange rate regime, the country is capable of making an early move in this regard.

 "Half of imports has been put on the market rate and most of the goods are now at the flexible rate. Interbank FX market has been reestablished. Therefore all the elements are there, so an early move is possible," she said.  

SB,  It seems things are lining up in Iran for the single exchange rate....

[WheresmyRV?]

18 hours ago, gregp said:

I'm having a better feeling towards the Iranian Rial. 

Me too I have been way more excited about the rial as of late. Jmo but I believe the dinar isn't going to pop for at least another year or more.

[Freedomwish]

1 hour ago, WheresmyRV? said:

Me too I have been way more excited about the rial as of late. Jmo but I believe the dinar isn't going to pop for at least another year or more.

If the Rial pops first in which its looking that way and for all we hope, you can bet a majority of us are gonna' buy a whole yacht load of some more Dinar!  That is if, the currency dealers won't jack up their prices at high levels!  Keeping the faith! 

[screwball]

1 hour ago, Freedomwish said:

If the Rial pops first in which its looking that way and for all we hope, you can bet a majority of us are gonna' buy a whole yacht load of some more Dinar!  That is if, the currency dealers won't jack up their prices at high levels!  Keeping the faith! 

Exacta Mundo....