Iranian Rial

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Governor of the Central Bank of Iran and the speaker of the National Assembly of South Africa met on Monday in Tehran, with both officials calling for expanded ties between Tehran and Pretoria.

"Identifying obstacles to economic ties between the two countries and trying to alleviate them have been one of the main priorities of this trip," said Baleka Mbete, elaborating on her delegation's journey to Tehran.

The official, who is also a former deputy president of South Africa and assumed her current office from May 2014, stressed that she will do her utmost to strengthen and expand relations between the two countries, the official news website of CBI reported.

She pointed to the Joint Comprehensive Plan of Action, the formal name of Iran's nuclear deal, as a good opportunity that has created the potential to revitalize economic and banking ties in the wake of sanctions relief.  

CBI Governor Valiollah Seif also pointed to the history of good economic and banking relations between Iran and South Africa, stressing that there are currently no unsolvable problems in the way of expanding banking ties between the two countries.

Noting that reestablishing correspondent banking relations between the two countries' lenders would be a prerequisite to expand trade, he expressed hope that the pending banking agreement between CBI and the South African Reserve Bank (the country's central bank), which has been in the making for some time, would materialize when President Hassan Rouhani visits the country later this year.

According to Seif, setting up a joint account between the central banks of Iran and South Africa for facilitating trade transactions is one of the main proposals included in the agreement.

"Banking ties between our two nations can begin from low-risk areas so that we can gradually ramp up our cooperation in the future when the current doubts are cleared," he added.

Seif noted that some Iranian banks have established correspondent ties with their South African peers without any impediments.

 

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Wednesday, September 06, 2017

Gov’t to Address Housing Demand of Needy Groups 

 

Despite the recent buzz in the housing market, the growth in prices has so far been on a par with the inflation rate that hovers around 10%, the head of Tehran Association of Realtors announced.

"Currently, there might be a few cases of prices rising above inflation, but the average does not crack that threshold," Hesam Oqbaei was also quoted as saying by Fars News Agency.

"However, during the second half of the current fiscal year (started March 21), home prices might jump a little further."

According to Oqbaei, the number of residential real-estate deals during the month ending August 22 reached 19,846, an unprecedented volume of sales since May 2014, which indicates an annualized growth of 27.4% while the figure marks an increase of 9.3% compared to the previous month.

This is while in the past three years, the average number of home sales in Tehran had not exceeded 13,000 per month.

Oqbaei noted that during the 10 days to September 3, the number of home sales and rental deals stood at 5,481 and 5,588 respectively. This has not notably changed compared to the previous year's corresponding period but compared to its previous month, the growth has been acceptable.  

"If the banking reforms had been implemented last year, we could have witnessed the housing sector's recovery sooner. But despite the fact that the reforms are not being enforced completely, positive changes are emerging," he said.

According to the Central Bank of Iran's latest major directive, banks and credit institutions were obligated to refrain from paying high interests after September 2 and cap their interests on one-year deposits at the previously set 15% while paying a maximum interest of 10% to short-term deposits.

The realtor believes bank deposit rate cuts will direct a portion of investments toward the production sector, including housing.

"Rate cuts will increase people's purchasing-power, prompt home construction and increase the sale of vacant houses," he said.

"As we get closer to the maturity date of Housing Saving Accounts' home loans, a more heated housing market is expected."

Conflicting Views

Secretary of Builders Association Farshid Pourhajat noted that high interest rates are the main reason behind economic sluggishness.

"People's low purchasing-power, the high risk of deals, shortage of home loans and banks' high interest rates prolonged the housing market's downturn," he said.

Pourhajat added that there are 24 million families in the country while the number of residential units stands at 22.8 million, which indicates a 1.3 million deficit.

Minister of Roads and Urban Development Abbas Akhoundi had recently put the number of empty houses in the country at 2.58 million, saying that was up from 630,000 five years ago.

Akhoundi referred to the housing sector as "the most manipulated sector of the Iranian economy" and noted that while there are 24.19 million households and the country has 25.4 million homes, the housing sector is in shambles.

Responded to Akhoundi's statements, Pourhajat said the existence of 2.5 million vacant homes highlights the fact that people's purchasing power has declined.

"The report, which says there are 2.5 million vacant homes, does not clarify where they are located. For instance, if the apartment is located in Tehran's high-end districts, it is obvious that the owner has bought it as an investment, which is not unusual," he said.

 

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Iran needs $50b foreign investment: Chairman

Tehran, Sept 4, IRNA - Iran requires attracting 50-billion-dollar foreign investment to achieve economic development and stability, Chairman of Tehran Chamber of Commerce, Industry, Mine and Agriculture said.

Long-term sanctions imposed on Iran have disconnected Iran from the world in the economic fields and we were not able to take advantage of markets, technologies and foreign investment, Masoud Khansari said.

After the implementation of Iran

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Attracting much-needed foreign funds and having access to cutting-edge drilling know-how are among the most essential elements to develop untapped hydrocarbon deposits in the Caspian Sea, the construction and engineering manager in Khazar Exploration and Production Company said.

"Tapping into the huge oil and gas deepwater offshore reserves in the region where the country has largely underperformed over the last four decades is high on the agenda," Masoud Matinfard was also quoted as saying by Shana on Tuesday.

Pointing to challenges in undertaking deepwater operations, Matinfard said being deprived of the state-of-the-art technology, in addition to the lack of infrastructure in the north, has strained the company's ability to develop the reserves.

According to the official, international energy majors' unwillingness to play a role in the Caspian Sea is "quite normal", as drilling at a depth of 1,000 meters with oil prices around $50 a barrel is discouraging.

Matifard noted that at the beginning of the previous decade, when oil prices ranged between $27-40, the South Caspian Study Group conducted a survey, based on which the cost of producing each barrel in the Caspian Sea amounted to $9.8 a barrel.

"Extraction costs have at least doubled compared to the time, while oil prices have only experienced a marginal growth," he said, adding that deepwater drilling is not appealing to oil majors anymore, even in the Gulf of Mexico and Brazil where it was profitable not long ago.

The official believes Iran's new model of oil contracts can play a major role in shoring up foreign investment.

"The more lucrative contracts are signed, the more motivation foreign enterprise will have to complete offshore initiatives," he said.

"Onshore oilfields are usually developed in a seven-year period, while tapping into deepwater reserves will take much longer."

Underscoring the significance of acquiring the know-how for expanding offshore fields, Matinfard said Iranian experts have been working on onshore hydrocarbon reserves for a century, yet there is still a long way to go with regard to deepwater operations.

  Foreign Collaboration

According to Mohsen Delaviz, KEPCO's managing director, Azerbaijan's oil officials have recently expressed interest in collaborating with KEPCO to develop Sardar-e-Jangal Gas Field in the Caspian Sea off Gilan Province.

"In addition to Azerbaijan, British, Dutch and Norwegian oil majors have also submitted proposals for joint ventures with KEPCO to tap into the rich oil and gas resources of the region," Delaviz said, adding that a decision will be made soon.

"It is likely that the Sardar-e-Jangal field, discovered in 2012, will be developed by Russia's Lukoil under the new Iran Petroleum Contract model."

In late 2015, Iran introduced three exploratory blocks in the Caspian region, known as 24, 26 and 29 as well as Sardar-e-Jangal, as part of its new oil and gas projects to attract foreign investment.

Delaviz said drilling here at a depth of 1,000 meters will not be viable due to its high operational costs, unless foreign companies and private companies step in.

Despite making significant headways in exploiting oil and gas resources in the south, energy developments in Iran's northern regions have made few headlines in the past several years.

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Iranian banks heading for South Africa

Tehran, Sep 5, IRNA – Governor of Central Bank of Iran Valliollah Seif said that the Iranian and South African central banks have prepared a memorandum of understanding (MoU) to boost Tehran-Pretoria banking relations and hoped that the document will be finalized during a visit to south Africa by President Hassan Rouhani.

Seif made the remarks in a meeting on Monday with visiting Speaker of the National Assembly of South Africa Baleka Mbete and her entourage.

He referred to the history of the two countries’ banking relations, saying that no serious obstacle exists in the way of boosting Tehran-Pretoria banking relations.

Noting that establishing brokerage relations between the two countries’ banks is the prerequisite to promoting trade and economic ties, Seif hoped that banking MoU between the Iranian and South African central banks would be inked during Rouhani’s trip to Pretoria this year later this year.

Opening joint bank accounts between the two capitals' central banks to facilitate their commercial exchanges is one of the articles of the draft agreement, Seif said.

Seif further pointed to the Iranian banking delegations' recent visit to South Africa and said that currently, the Iranian banks have no problem for establishing forging brokerage ties with their South African counterparts.

Mbete, for her part, welcomed bolstering of trade interactions between Iran and South Africa, saying that that her visit to Tehran was mostly aimed at identifying obstacles in the way of bilateral economic ties and preparing the ground for removing those obstacles.

Expressing pleasure over lifting of Iran’s nuclear sanctions, she described the historic nuclear deal also known as the Joint Comprehensive Plan of Action (JCPOA), as a good opportunity for further development of economic and banking relations between Iran and South Africa.

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Economy, Business And Markets

Wednesday, September 06, 2017

Iran Raises Foreigners' Bank Account Limit

 

In its most recent meeting, the Money and Credit Council, a top financial decision-making body, has ruled to raise the ceiling set for the annual turnover of rial accounts allowed for foreigners in Iranian banks.

According to the ruling, foreigners will now be able to keep a yearly turnover of up to 5 billion rials ($130,000) in their accounts while the previous cap had been set at 1 billion rials ($25,800).

In mid-February, it was announced that for facilitating banking services provided to foreign investors, CBI has communicated a directive approved by MCC, which allows foreigners to open rial deposit accounts in the country’s banking network.

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From feb...

 

In order to optimize the opportunities created by the removal of sanctions following Iran’s nuclear deal and to ease banking services to foreign investors, the Central Bank of Iran has communicated a directive allowing foreigners to open rial deposit accounts in the country’s banking network. In the 1,227th meeting of the Money and Credit Council on January 3, 2017, new regulations were approved to facilitate the opening of rial bank accounts for foreigners. After the successful implementation of those regulations, more credit and banking services are expected to become available to foreign investors in the near future.        

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Indians push for undersea gas pipeline from Iran

Wed Sep 6, 2017 10:27AM

1. Home
2. Iran
3. Energy

The planned pipeline would connect Iran’s vast gas reserves with Omani consumers as well as with liquefied natural gas (LNG) plants in Oman that could re-export the gas.

With a $7 billion project to pump gas from Iran discarded, a 1,300 km undersea pipeline is finding new proponents in India where they say natural gas from the Persian Gulf can reach at rates less than the price of LNG available in the spot market.

The Associated Chambers of Commerce of India (Assocham India) has released the results of its study on “a trans-national deep water gas pipeline from Iran, passing through Oman but by-passing Pakistan,” it said.

The project could help feedstock the country’s power, fertilizer and steel plants in an environment-friendly and affordable way and for sustainable supply of the fuel, it said.

“An undersea pipeline between Iran-Oman-India will connect the producers and consumers of gas directly. This will bypass all geopolitical issues. It will also lead to more gas-to-gas competition and creating a genuine gas hub, as in Europe/USA etc,” the study suggested.

Iran signed the undersea agreement in 2013 to supply gas to Oman in a deal valued at $60 billion over 25 years. In February this year, the two countries said they had agreed to change the pipeline’s route to avoid waters controlled by the United Arab Emirates.

Iran and Oman signed a deal in 2013 over the export of natural gas from the Islamic Republic to the Persian Gulf Sultanate through a subsea pipeline. (Photo by IRNA)

The planned pipeline would connect Iran’s vast gas reserves with Omani consumers as well as with liquefied natural gas (LNG) plants in Oman that could re-export the gas.

India’s former oil secretary T.N.R. Rao, who released the study on Tuesday, said the Iranian pipeline in Oman can be extended to Porbandar in Gujarat.

Rao said natural gas imported through the line would cost $5-5.50 per million British thermal unit at the Indian coast compare with LNG imported through ships which costs about $7.50 per mmBtu.

“The cost of landed gas through an undersea pipeline will be at least $2 cheaper than importing LNG, saving about $1 billion annually,” the study said.  

South Asia Gas Enterprise Pvt Ltd (SAGE), which is chaired by Rao on the company’s advisory board, has volunteered to lay the pipeline which would bypass the exclusive economic zone (EEZ) of Pakistan. It wants the government to support the pipeline and help buyers enter into contract.

The pipeline, estimated to cost over $4 billion, is planned to carry 31.5 million standard cubic meters of gas per day and would be built in two years.

Rao said gas from other nations can also be sourced through the pipeline, citing Turkmenistan which has a pipeline supplying gas to Iran in the north. Iran, he said, can use the Turkmen gas for its own use and supply and equivalent volumes to India from its offshore fields.

An aerial view of Iran's gas hub Asaluyeh 

India is now the fourth largest natural gas importer, mainly from Qatar. The study said India must build a least one trans-national gas pipeline in the next five years for use in its idled power generation capacities, new fertilizer plants, steel mills and construction companies.

The undersea pipeline is being promoted as an alternative to the onland Iran-Pakistan-India pipeline, dubbed the “peace pipeline,” which New Delhi quit in 2009, a year after signing a nuclear deal with Washington.   

The project has faced repeated delays since it was conceived in the 1990s to connect Iran’s giant South Pars gas field to the subcontinent.

On Tuesday, Minister of Petroleum Bijan Zangeneh said he thought Iran's gas would eventually be exported to Pakistan.

Read more 

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Iran eyes generating $4 trillion of annual income in India: Official

Tehran, Sep 5, IRNA – Enhancement of Iran business engagement in India to generate an annual income of four trillion dollars is a major goal Tehran is following to achieve, an Iranian official at Tehran Chamber of Commerce, Industries, Mines and Agriculture said on Tuesday.

'Iranian and Indian businessmen can be pioneers in developing the economic diplomacy between Tehran and New Delhi,' Bahman Eshqi, Secretary General of TCCIMA said at a trade meeting in the Iranian capital.

Addressing a business forum attended by Iranian and Indian traders and businessmen, Eshqi said that Iran and India managed to maintain ties even in the sanctions era.

Anti-Iran sanctions were lifted in January, 2016.

'Today, India is seeking to attract foreign investments and apparently no other country in the vicinity of India is more capable than Iran to serve as a source of investment for the nation,' the official added.

He went on to say that trade exchanges between the two countries is to a large extent oil-based.

'India is the world's second biggest customer of the Iranian oil,' Eshqi said. 

As the second most populous country in the world and the seventh largest by area, India is in need of energy to develop its economy, the trade official said.

Iran can easily and securely meet the energy needs of the country, he added. 

Experts are of the view that Iran and India can capitalize on the Chabahar joint development project as well as the North-South Corridor to boost the volume of trade exchanges between the two nations.

North–South Transport Corridor is a sea, rail, and road route expected to facilitate and boost exchange of goods between India, Russia, Iran, Europe and Central Asia.

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Iran, France ink agreement on flare gas recovery

Tehran, Sep 6, IRNA – Iranian and French companies inked an agreement on cooperation in flare gas recovery at a refinery in Iran's South Pars gas field on Wednesday.

The agreement was signed by National Iranian Oil Company (NIOC), French oil and gas firm 'SOFREGAZ' and Iran's Sanat Sazeh Samin Co.

Iranian director of the South Pars sustainable development plan Ali-Mohammad Ahmadi, SOFREGAZ CEO Yann Aubry Lecomte and Managing Director of Samin Co. Kourosh Ahanj signed the 30-month agreement for the South Pars Second Refinery Flare Gas Recovery and Utilization Project (Phases 2&3).

The implementation of the project costs 42 million euros.

The projct takes two years to be implemented, and and it needs six months to be handed over to the Iranian experts. 

According to the Iranian officials, if the experiences to be gained from this project are successful, they will be used later to equip other South Pars refineries.

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Foreign exchange rates increased in Tehran's market on Wednesday, following the Central Bank of Iran's latest regulations concerning foreign currency offered at banks to travelers.

According to the latest directive by the policymaker published on its official website, banks are allowed to "sell travel currency at open market rates starting from September 11".

That is while at present, banks are offering foreign currency with a cap of $300 to travelers at official rates that are about 600 rials lower for each dollar compared to the open market rates. This means that the sale of capped currency at lower prices is effectively removed because the banks will offer foreign currency at rates also offered by moneychangers.

What has remained unchanged is that people taking part in the Arba'een pilgrimage (coinciding with Nov. 9) to neighboring Iraq will be able to purchase, at official exchange rates, a maximum of $200 for the purpose of their travel from the designated banks.

At the time of the directive's announcement, the US dollar was priced at 38,940 rials, 84 rials or 0.21% higher than the previous day’s close, Tehran Gold and Jewelry Union's website reported.

Euro was quoted at 48,100 rials on Wednesday in the open market, indicating a 0.12% or 60-rial drop compared with Tuesday’s close.

The British pound was traded for 50,660 rials, 310 rials higher than the previous day’s close. Turkish lira’s prices reached 12,090 rials on Wednesday, marking a 2.03% growth.

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As Iran pushes reforms to privatize its economy and improve the business landscape, the country's private sector is taking a more proactive approach in convincing the government to liberalize the economy and free it from the Kafkaesque bureaucracy hindering entrepreneurism.

As part of its plans, the business community is teaming up with global rating agencies to provide a roadmap for economic liberalization and remove negative stereotypes falsely projected in the world media about conditions in Iran.

"Our main objective is to improve the ease of doing business and in doing this, we know what the challenges are, which is why we are seeking the wisdom and experience of other countries that have gone through the same process," Ferial Mostofi, the head of Investment Commission at Iran Chamber of Commerce, Industries, Mines and Agriculture, said.

On Monday, TCCIM, of which Mostofi is also a senior member, hosted a seminar with senior fellows of Fraser institute–a Canadian research firm that, among other things, measures economic freedom across the world–to discuss ways of improving Iran's economic freedom index.

The event was attended by senior business figures and government officials as well as Omani officials, including Salem Al-Ismaily, the sultanate's chairman and CEO of Oman Public Authority for Investment Promotion and Export Development.

Mostofi, who has been the main force behind the seminar, said she was first inspired to pursue the issue after hearing a speech by the Omani official during one of her foreign trips.

Al-Ismaily, who has led his country's transformation into an attractive place for doing business, explained how his country faced the same challenges and that Iran can achieve the same with a strong plan and consensus among different bodies.

Addressing the same event, Michael Walker, a senior fellow with Fraser, and Fred McMahon, its chair of Economic Research, gave a review of the countries' status in the Economic Freedom Index where Iran stands  at a dismal 150th among 159 countries.

"As a first, you have to try and keep people in your own country," Walker said, referring to the high rate of brain drain in Iran with many educated and skilled population leaving the country every year.

Stressing that some 400,000 Iranians reside only in North America, he urged Iranian authorities to come up with ways to encourage their people to stay in their homeland–similar to what China did in the late 70s, which led to its economic turnaround.

McMahon recommended ways of reducing corruption, simplifying laws and leveling the playing field and "not throwing sand in the engine of economic growth" by putting roadblocks in the way of economic activity.

"Iran is a tolerant, open and educated society, and this makes it achievable," he said.

 

Starting a Movement

According to Mostofi, the entry of Fraser into Iran would be just the beginning of the arrival of major rating agencies in Iran.

She believes that will be helpful in influencing policymakers to espouse a more business-friendly attitude.

"This has already caused ripples both in the government and the parliament," she said, pointing to the attendance of Economy Ministry officials at the Monday meeting and the request ofseveral MPs for a report of the discussions. "The government and the central bank have so far been cooperative," she said.

"We also believe that a closer cooperation with rating agencies will lead to their change of perception about Iran, as it has already happened with Fraser when their staff were impressed with the level of potential and knowledge in the Iranian population and the business community."

This, she reckons, has prodded them to have a more positive mindset when rating Iran.

Mostofi also shared with Financial Tribune the business community's efforts to tap the potentials of the Iranian diaspora by soon convening a special gathering to accelerate that initiative.

Tehran's chamber of commerce, in the aftermath of Iran's nuclear deal, has formed a special post-sanctions committee comprised of senior experts and former diplomats to capitalize on opportunities created by the deal.

The efforts to reach out to Iranian expatriates in other countries are being followed up by that task group.

 "That is exactly what China did when it launched its open-door policy and will tap the resources and talents of the many Iranians living overseas," Mostofi said.

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Acomprehensive system for exchanging information on combating money laundering pertaining to Bank Melli Iran, the nation’s biggest lender, has been established by the bank with the support of the Ministry of Economic Affairs and Finance.

Gholamreza Panahai, a member of BMI’s board of directors and Meysam Nassiri Ahmadabadi, the head of the Economy Ministry’s Financial Intelligence Unit and the High Council of Anti- Money Laundering, unveiled the system at a ceremony held in Tehran on Tuesday, the official website of the bank reported.

Panahi said BMI should play a leading role in combating money laundering, including the implementation of the Law of Combating Money Laundering passed by the parliament.

“Any revenues that emanate from illegal activities, and the exchange and deposit of any fund resulting from them, are subject to the law,” he said.

He added that the main goal of the AML system will be to prevent any such funds from entering the banking system because “blocking the circulation of these monies will surely play an important part in the transparency and health of the economy”.

Moreover, if Bank Melli wishes to become a more serious player in the international banking system, it must adhere to global regulations and standards because it would be unable to conduct operations on an international scale without them.

“AML efforts would also boost the bank’s credibility and its ability to offer more transparent services to Iranian customers,” he added.

Panahi, who is also BMI’s deputy for foreign exchange and international affairs, said the AML system is another step in line with boosting the lender’s foreign credibility in terms of conforming to international standards.

According to the official, the first step toward this goal is “creating a culture of adhering to accepted standards and entrenching AML policies among its staff members, customers and managers of the banking system throughout the country”.

Panahi noted that the lender aims to continuously upgrade the system to evaluate suspicious bank accounts with the least amount of errors. He added that many more improvements will be made to the system within the next month to put the services offered by BMI within the framework of KYC (know your customer) guidelines and gain the approval of FIU.

“It is necessary for members of BMI’s board of directors and all staff members of its various branches to be well-versed in AML conformity,” he said.

On Saturday, Panahi had said, “A total of 1,200 Bank Melli staff members have completed online courses on standards devised by the Financial Action Task Force on combating money laundering.”

He announced that all BMI workers will soon undergo similar courses while those who complete the courses will receive a certificate that will be necessary for their continued presence in the bank.

In the Tuesday ceremony, the FIU chief reminded that as per a previous request from Iran, the country has until January 2018 to present the International Monetary Fund with a thorough report on its AML measures in line with FATF standards.

“In this regard and in light of the fact that Bank Melli currently possesses close to 50% of all the information pertaining to customer accounts held by the Iranian banking system, it plays an irreplaceable role in AML efforts and improving Iran’s stance in the international community,” Nassiri said.

  More NDFI Resources

Last year, Bank Melli was able to employ more foreign exchange resources from the National Development Fund of Iran compared with the year before.

During the fiscal year to March 2016, the bank was authorized to use $245 million of forex loans allocated by the sovereign wealth fund, which were spent on the construction of four industrial projects.

That is while in the previous fiscal year to March 2017, “with the new openings made in the foreign exchange and international affairs of Bank Melli”, the lender was permitted to use $330 million of NDFI resources as part of its agency agreement with the fund.

As outlined by BMI chief executive, Mohammad Reza Hosseinzadeh, the lender allocated loans to seven major projects, one each in a province.

“These projects were implemented with the backing of Bank Melli in the form of more than 4.7 trillion rials ($120 million) of rial loans and $37.83 million in foreign exchange loans,” he added.

According to Hosseinzadeh, the aforementioned projects have been implemented in West Azarbaijan, Semnan, Fars, Mazandaran, Kurdestan, Gilan and Yazd provinces.  

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Anew freight train service bound for the Iranian capital of Tehran was launched from Yinchuan City of northwest China's Ningxia Hui Autonomous Region on Tuesday.

The second freight train departed at 10:00 a.m. from Yinchuan South Railway Station, carrying some 560 tons of cargo, including mechanical equipment, ceramic tableware, crystal ware and automobile accessories, worth around $1.6 million, China Global Television Network reported on its website.

The freight train is scheduled to reach Tehran in about 15 days, travelling via Kazakhstan and Turkmenistan, according to Xinhua Silk Road Information Service.

"The train takes more than 20 days less than transporting by ship, and is expected to greatly lower our delivery costs," said Liang Hua, whose company is in charge of the operation.

Lying on the route of the Belt and Road Initiative, the Ningxia autonomous region has gained support from the central Chinese authorities to strengthen its role as a trade and logistics hub.

According to Kong Guohua, an official from Ningxia's Department of Commerce, the new cargo route will help increase trade between China and countries in central and west Asia.

Following the launch of the freight train, Ningxia will continue to expand Yinchuan-Tehran freight rail cooperation, including normalizing the freight trains' schedule, branding the service and attracting enterprises from all industries to work on International Capacity Cooperation projects in the region.

This is the second time China is sending a freight train down the route to Tehran.

> Maiden Journey

The first train set off from Yiwu City in China’s Zhejiang Province on January 28. It covered 10,399 km, passing through Kazakhstan and Turkmenistan, to reach the border station of Sarakhs in Iran’s Khorasan Razavi Province after 14 days.

The route, better known as the New Silk Road, was first proposed by He Huawu, the chief engineer of China Railway Corporation in late 2015.

From Tehran, the grand project will join Iran’s east-west network leading to Turkey and eastern Europe. It could also open a way to Europe via a developing rail route from southern Iranian ports to Azerbaijan and Europe.

The Belt and Road initiative, put forward in October 2013 by Chinese President Xi Jinping, includes several corridors through land and sea, including the New Silk Road rail route, which will serve as a tailwind for the transport of goods and energy between Iran and China.

The two sides have set a long-term bilateral trade target of $600 billion a year.

In a meeting with his Chinese counterpart, Xiao Jie, in China back in May, Iran's Minister of Economic Affairs and Finance Ali Tayyebnia said, “Iran’s position in Xi Jinping’s innovative plan to revive the New Silk Road is spectacular and ideal. Therefore, we intend to play an effective role in its implementation.”

Iran resolved issues regarding government guarantees during Tayyebnia’s visit to China to represent Iran in the New Silk Road Forum, which opened on May 14 with China and 29 other nations reaffirming their commitment to build an open economy and ensure free and inclusive trade, under the Belt and Road initiative.

Tayyebnia noted that Iran has been a part of the ancient Silk Road—a route contributing for centuries to trade and cultural exchange—stretching from Japan to the Mediterranean Sea, and intends to play a more important part in the new Silk Road plan.

 

> Chinese Financing for New Silk Road Strand in Iran

China signed a contract with Iran in Tehran back in July to finance the electrification of a strand of the New Silk Road in Iran—a 926-km railroad from Tehran to the eastern city of Mashhad in Khorasan Razavi Province with a $1.5 billion loan.

The railroad is part of China's New Silk Road initiative.

As per the agreement, signed after 16 months of negotiations, the guarantee for the loan, which is to be granted by Exim Bank of China, will be provided by Iran’s Bank of Industry and Mine.

The electrification project will be carried out by China National Machinery Import and Export Corporation, otherwise known as CMC.

According to Maziar Yazdani, the deputy head of Islamic Republic of Iran Railways, the electrification of Tehran-Mashhad railroad will take four years.

The route is already double-tracked and both tracks will be electrified as part of the deal with the Chinese side. This will raise the speed of the line from the current 160 kph to 200 kph, significantly reducing the duration of a trip between the two cities.

For Iran, the electrification of Tehran-Mashhad line is part of its wider rail development plan to electrify all railroads by 2025.

[pokerplayer]

Things are ramping up fast !! This is getting very Interesting to the point were I'm getting that warm and fuzzy feeling again. !

 

   pp

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i hope this year pp

[gregp]

Lots of movement. Thanks!

[markb57]

Go Canada!!!!!!!!!!

[Freedomwish]

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The Central Bank of Iran is to reevaluate and upgrade its rules and general approaches regarding foreign currencies, says the bank's deputy for foreign exchange policies and regulations days after changes were made in regulations concerning foreign currency offered by banks to travelers.

"On the order of central bank's deputy for foreign exchange and in line with increasing transparency, stabilizing regulations, clearing ambiguities, making basic rules compatible and facilitating foreign exchange services to bank customers, foreign exchange regulations are being reviewed," Mehdi Kasraei-Pour was also quoted as saying by the official news website of CBI.

The latest significant change in the foreign exchange workings of banks came on Wednesday when the central bank issued a directive ruling that banks are allowed to "sell travel currency at open market rates starting from September 11".

Banks currently offer foreign currency with a cap of $300 to travelers at official rates that are about 600 rials lower for each dollar compared to the open market rates, meaning that the ceiling for the sale of currency for travel at lower prices is effectively removed.  

Kasraei-Pour noted that experts at CBI's Foreign Exchange Policies and Regulations Department are working to review and update regulations and will ask for the feedback of pundits in the foreign exchange network of banks.

After final reviews are made and banking officials put their seal of approval on the new set of regulations, they will be formally communicated to the banking system "to take a significant step toward improving the climate of doing business in the country".

Improving the nation's business climate has increasingly emerged as a priority across various sectors, especially in light of the World Bank's Doing Business 2017 report that indicated Iran has slightly regressed in improving its entrepreneurial climate following years of lackluster performance.

According to the report, from a total of 190 countries, Iran ranks 120th in the index for ease of doing business and is placed 16th among 25 countries in the Middle East and North Africa region.

According to Kasraei-Pour, the upgrade in foreign exchange regulations will be made in a way that "if the plan to unify the foreign exchange rates is implemented, the new regulations would undergo the least amount of changes".

The central bank has been striving to unify the dual exchange rate regime for years. While it had promised that the official and unofficial rates would be unified by the end of the previous fiscal year in March, the lack of prerequisites such as ties with credible international banks delayed the plan.

Immediately after the administration of President Hassan Rouhani began its second tenure almost a month ago, CBI Governor Valiollah Seif renewed his pledge that the rates will be unified "soon in the new administration".

As Kasraei-Pour outlines, CBI began devising rules pertaining to foreign exchange workings as part of a unified and coherent set in 2002.

That was when policymakers first became serious about unifying the dual exchange rates and decided to prevent policymaking disorder by categorizing all the rules and bringing them under one umbrella. 

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Nice...coming soon 

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Following the final agreement for a multibillion dollar South Korean finance deal for Iranian projects, private Iranian banks have signed a memorandum of understanding with their South Korean counterparts with the aim of expanding correspondent banking relationss.

The MoU was signed during a meeting in Seoul between Kourosh Parvizian, the head of Iranian Association of Private Banks and Credit Institutions and the Korea Federation of Banks Chief Ha Yung-ku on Friday.

"Banking executives of both nations met for bilateral negotiations on [removing] hurdles on the way of establishing banking ties and engaging in banking transactions, and agreed on a number of issues to expand their ties," Mohammad Reza Jamshidi, secretary-general of Iranian Private Banks' Association, told IRNA.

According to Jamshidi, a delegation consisting of chief executives with a number of major Iranian private banks and credit institutions travelled to the South Korean capital at the invitation of KFB.

"CEOs of Bank Pasargad, Bank Parsian, Middle East Bank, Shahr Bank, Bank Day, Bank Mellat, Tourism Bank and Melal Credit Institution were part of the delegation," he added.

As Jamshidi says, the two sides agreed as part of the MoU to increase their non-dollar transactions, employ new technologies in the banking industry and exchange experts for educational purposes.

Iran has been gradually working to offset the role of US dollar in its dealings and financial reporting, as longstanding initial US sanctions remain in place and that is why it prefers to engage in banking ties with South Korea in other currencies, especially euro.

"Iranian banks wanted a bigger share of the deals to be made in euro in the negotiations, which was welcomed by the Korean side," Jamshidi said.

Iranian officials have repeatedly said it would not be practical to engage in greenback since it does not play a major role in the country's currency basket and foreign exchange resources.

In a statement, KFB also confirmed that it has signed an MoU with its Iranian partners for boosting bilateral cooperation.

As reported by Yonhap, South Korea's largest news agency, the two entities agreed to facilitate banking services for exporters and importers of both countries in a move "designed to meet growing demand for financial services due to increased trade".

Jamshidi pointed out that the trip by the Iranian delegation to Seoul was made in order to follow up on and finalize initial agreements that were made as part of the former president Park Geun-hye's landmark Tehran visit in early May.

Friday's trip was supposed to take place about two months ago, he added, but it was delayed due to its coincidence with Iranian banks' shareholders' meetings.  

The MoU comes on the back of the €8 billion South Korean finance for Iranian projects finalized in Seoul last month between the Korea Export–Import Bank and 12 Iranian agent banks.

As part of the agreement, the Korea Trade Insurance Corporation is to guarantee up to €5 billion of finance activities in Iran.

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n official of the Central Bank of Iran has announced the details of regulations related to dormant accounts that were passed by the Money and Credit Council in early August.

“The large number of inactive bank accounts without any financial circulation has been on the agenda of the Iranian banking system in recent years, which has inflicted extra cost on banks for data maintenance while the big volume of these accounts raises the risk of abuse,” Hamidreza Ghani-Abadi was also quoted as saying by Mehr News Agency.  

The regulations concern identifying and managing the inactive accounts of banks and credit institutions, as well as protecting the rights of account owners and preventing any attempt to misuse those accounts.

The regulations also urge banks to set up a unified accounting system   regarding dormant accounts, which also helps improve the transparency of their financial statements.

According to Ghani-Abadi, the head of CBI’s Banking Research & Regulations Department, short-term deposits will be considered as dormant if they remain active for two years while the period for savings and current accounts has been set at three years and one year respectively.

He added that if an account is considered dormant, the bank is obligated to notify the owner of the annulment of the account via text message.

“After two years, if the owner of the account does not come to resolve the case, the bank should find another active account for the owner and move the money to that account,” he said.

The CBI official noted that it takes nearly seven years for a savings account, five years of inactivity for short-term deposits and four years for a current account to be considered dormant, following which CBI can set maintenance fees—say under 500,000 rials ($13)—so that the accounts’ balances gradually diminish.

 Snowballing Problem

In recent years, deposit accounts of banks and credit institutions have increased, with a considerable number of them remaining inactive for a long time. For instance, many of these accounts have lost their value due to rising inflation or because the owner has stopped using the account.

Ghani-Abadi emphasized that the balance of each of these accounts might be meager but they are large in terms of number, so the overall value is a considerable amount that creates a good opportunity for money launderers to hide their operations behind the shadow of dormant accounts.

“These regulations only concern deposits under 20 million rials ($520), as we believe if the value of someone’s account is higher than that, they will most probably come back for it,” he added.

This is the first time Iranian banking policymakers have devised a set of firm regulations to manage banks’ dormant accounts while earlier, there was only a few obscure bylaws.

The CBI official announced that as per the new regulations, an individual is only allowed to have one solo and one joint current account, one solo and one joint short-term deposit account and one solo and one joint savings account in each bank and credit institution.

He noted that decentralized accounts (traditional accounts) will also be closed within six months of the regulations’ enforcement.

“Banks and credit institutions must report the figures on their dormant accounts to CBI’s board of directors, supervisory department and internal auditors every six months,” he said.

According to Ghani-Abadi, the implementation of new regulations is mandatory within three months of its notification.

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he Economic Office at the Central Bank of Iran has briefed the Money and Credit Council on the latest economic developments in MCC’s most recent meeting late Tuesday. According to CBI’s official website, the policymaking body was briefed on macroeconomic developments as well as indicators such as the inflation rate and foreign exchange. Liquidity, monetary base, changes in banks’ overdrafts from the central bank and CBI’s measures to curb them, interbank market developments assessed by the volume of transactions and rates, banks’ loan performance and plans to support production and employment were among other issues discussed in the meeting. It was also decided that the second part of the report–focusing on CBI’s measures in ??the monetary market and interest rates–be presented at MCC’s next meeting that has not been scheduled yet.  

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Banks currently offer foreign currency with a cap of $300 to travelers at official rates that are about 600 rials lower for each dollar compared to the open market rates, meaning that the ceiling for the sale of currency for travel at lower prices is effectively removed.  

Kasraei-Pour noted that experts at CBI's Foreign Exchange Policies and Regulations Department are working to review and update regulations and will ask for the feedback of pundits in the foreign exchange network of banks.

 

 

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