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While businesses are eagerly awaiting the unification of foreign exchange rates, the head of the Tehran Chamber of Commerce, Industries, Mines and Agriculture says conditions are rife for the long-awaited unification plan to finally become reality.

"Considering the status of oil revenues and a relative stability in the foreign exchange market, the best possible circumstances have presented themselves and there is no more room for hesitation when it comes to the unification of forex rates," Masoud Khansari was quoted as saying by khabaronline.ir news website.

Oil prices which have fallen by more than half since 2014 due to overproduction regained some ground in the wake of OPEC member states agreeing this week in Algiers to finally cap production levels.   

"The existence of an official rate that is different from the real rate in the open market can only be justified under extremely rare circumstances, such as war," Khansari added.

Single currency rates are a crucial requirement for the reintegration of Iran into the global banking system and payment networks. Iran was forced to revert to the controversial double exchange rate regime after international sanctions unleashed chaos in the forex market in 2011-12 in which the national currency, the rial, lost almost 70% of its value within days.

Brave New World

For Iran's economy to be able to compete in local and international markets, says the TCCIMA head, "it must once and for all embrace floating rates."

As to any other major conditions needed for implementing the currency unification plan, Khansari said no special conditions are required. "Actually it is the process of interfering with forex rates and employing a dual rate system that requires unique circumstances," he added. "Like any other commodity, forex rates must be allowed to float and endure in the market based on the mechanism of supply and demand."

Referring to the recent policy of the Central Bank of Iran allowing commercial banks to trade in the parallel foreign exchange market and efforts undertaken to minimize the discrepancy between official and unofficial forex rates, he expressed the hope that the government will soon be able to unify the rates.

"What has so far impeded the process is government procrastination and concerns about possible tensions."

Forex rate unification has for long been a hot-button issue in economic debates , with the CBI governor Valiollah Seif repeatedly heralding the implementation of the plan by the end of the current fiscal year in March 2017.

In his latest remarks, the minister of economy also stressed that the forex rates will certainly be unified by the yearend. "The government is adamant on unifying the rates," said Ali Tayyebnia, adding, "The scheme will be implemented by the end of the current year.

The CBI managed to unify forex rates back in March 1993, when foreign currencies were traded at 12 different rates. The provision proved short-lived with single rates being halted after seven months. The CBI employed a single rate regime once again in 2002-03, which also failed to produce the desired results.

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FW....hate to disappoint you but Im not a "brother"        more like a sister ,girl, dudett , millionairess, female,  all of the above .....   

Talked with my banker buddy here in town to see if she was given even an Inkling of anything possible in the works. Nope She said that if or even if ever any country changes rates in a dramatic manne

Once we get the green light from Canadians banks I will put the plan in place so I can send to any interested so they won't need to figure out what to do here. As in paperwork, I.D. ect. pp

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Sunday, October 02, 2016

Turkish Bank to Seal Iranian Deal Soon

 

Turkish investment bank Unlu & Co aims to complete the acquisition of an Iranian brokerage in the next six months and become the first Turkish financial services firm to operate in Iran since the easing of sanctions, its chairman said on Friday as reported by Reuters.

World powers in January lifted most sanctions against the Islamic Republic in return for Tehran complying with a deal to curb its nuclear energy program, ending years of economic isolation. Turkish trade with Iran has since risen some 30 %.

"We aim to conclude the acquisition in the next three to six months," Mahmut Unlu, chairman and chief executive of Istanbul-based Unlu & Co, told a news conference.

The bank, which specializes in mergers and acquisitions and portfolio management, has also established an open-ended fund to invest in Iranian companies and has been hired by a Turkish consumer goods firm to find acquisition targets in Iran, Unlu said.

"The Turkish company we are advising is in talks to buy a majority stake in an Iranian firm. It will be a $60-70 million deal," he said, without giving further details.

Stating that they would assess organic and inorganic growth opportunities in the region, Ünlü said: “Our first step in this direction will be in Iran. As the market further opens up, we will be providing merger and acquisitions advisory, fund management and brokerage services to our clients in Iran.”

In line with its target of being a regional investment bank, Unlu & Co also aims to start operations in Egypt. Unlu said the bank aimed to be operating in all three countries within the next five years.

ÜNLÜ & Co also has representatives in Malaysia and Singapore, he said, adding that they would become an active player in London, at the heart of European financial markets.

Turkish Prime Minister Binali Yildirim said this month that Turkey aims to normalize relations with Egypt, strained since the Egyptian army, under President Abdel Fattah al-Sisi, ousted Mohamed Mursi as president following mass protests in 2013. Turkey had built close ties with Mursi, Egypt's first Islamist president.

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  1. World Economy
Sunday, October 02, 2016

Mexico CB Hikes Benchmark Rate

 
 
 

Mexico’s central bank raised its benchmark rate 50 basis points to 4.75%, hoping to stem risks that a weak peso could fan inflation after a sell-off in the currency sparked by fears Donald Trump could win the White House.

The Banco de Mexico bumped up rates to their highest level since 2009, when the Mexican economy was mired in the global economic crisis. The hike was in line with the median forecast of a Reuters poll of analysts this week.

“With this action, the aim is to stem inflationary pressures and keep inflation expectations anchored,” the bank said in a statement, adding that the latest increase did not herald the start of a monetary policy tightening cycle.

The rate rise followed a unanimous 50-basis-point hike in June to keep the ailing peso from pushing up consumer prices.

Mexico’s peso has hit a series of record lows in recent months, and inflation rose faster than expected in early September with the annual core reading just above the central bank’s 3% target for the first time since late 2014.

“If Trump wins, the peso is going to keep depreciating, and they will have to raise rates higher still, and then what’s the limit?” said Barclays’ Mexico economist Marco Oviedo. “Another 100 basis points, or another 150?”

The beleaguered currency, which has lost over 3% so far this month, weakened to just under 20 pesos per dollar in the lead-up to the US presidential debate on Monday.

However, the currency surged after the face-off, in which Democratic candidate Hillarious Clinton was perceived to have performed better than Trump, leading investors to trim bets on steeper rate hikes in coming

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Inflation declining trend ‘hits hard inner core’

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News ID: 3784268 - Sat 1 October 2016 - 20:19
TEHRAN, Oct. 01 (MNA) – With inflation rate now hitting a hard inner core, government should cope with the challenge of the increasing, albeit piecemeal, inflation rate.

In recent few months, Rouhani’s government had been euphoric about the prospect of a single-digit inflation rate the achievement of which was much-envied and expected; now however, the euphoria is gradually replaced by a grim prospect of handling an economy once again facing the increasing rate of inflation; this is however not unexpected to the government’s economic entourage as well as other observers outside it who believed that from a certain point, controlling inflation would be an uphill task, since point-by-point inflation has been increasing.

Government has set a priority for itself taming the wild beast of inflation, and no signs are in the horizon that the government would abandon the policy altogether to seek other options to bring boom to the economy; government’s conduct of recent months provides evidence of this policy; but the waves have now turned for Mr. Rouhani’s cabinet with inflation turning to be in a rising pace, challenging some of government’s plans to curb the beast; official statistics of the Central Bank shows a disturbing trend in inflation since June, while observers believe that at the end of the day, the overall effect will apply to the annual rates. This would be a legacy President Rouhani’s government leaves for the next government coming out of May 2017 presidential elections. For an overall inflation rate of less than 10 per cent, a point-by-point inflation rate of 0.8 per cent is a necessity, which is far from that figure of the recent months. A second factor is liquidity which contributes to rise in inflation, and there is a direct connection between the two in a course of 6 or 9 months.

Mehdi Taqavi, an economist, told Mehr News Economic service that concerns over point-by-point inflation should be played down; “the window is no longer open for the return of inordinate amount of inflation rate of past years, and many accounts of return of inflation in scales should not be considered as genuine,” he added.

“Some analysts would cast doubt on government’s newly-launched plans to boost production, objecting that input of money to the market helps the beast to rise from its ashes, while the input has targeted production sector, and accordingly, has boosted supply side; the government has worked to stimulate demand side to avoid the effects of imbalance,” Taqavi told Mehr News.

The knell has been tolled for the government, calling for more robust anti-inflationary policies by the cabinet; however, with government working to set a unified exchange rate at least for few months, the policy will contribute to a certain amount of inflation.

 

SH/3783429 

 

 

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TEHRAN, Sep. 30 (MNA) – Following the conclusion of the nuclear deal between Iran and great powers, the European Union countries, Germany in particular, are fostering their economic cooperation with Tehran.

For decades before sanctions were imposed, Berlin was Tehran's biggest trading partner. The gap in Iranian imports from Germany and other Western countries was subsequently filled by Chinese, Korean and Middle Eastern competitors, and now thanks to the removal of nuclear-related sanctions against Iran, economic ties between Tehran and Berlin have been improved.

As per the latest German government data, German exports to Iran, especially of machines and equipment, rose significantly in the first quarter of the 2016.

So far, several numbers of the European officials have voiced their readiness to continue supporting the implementation of agreement, officially known as the Joint Comprehensive Plan of Action throughout the lifetime of the agreement, as well as the UNSC Resolution 2231.

Thanks to being the safest and the most secure country in the region, Iran enjoys considerably high number of young population and educated people which make it a promising trading partner and market for foreign investments.

Without doubt, Iran is considered as an eye-catching and lucrative market for several European countries like Germany with not only 80 million people it has but also with 400 million people given its access to the 400 million-strong neighboring markets.

According to the International Monetary Fund, Germany enjoys the largest economy in Europe with a nominal gross domestic product in 2016 of $3.5 trillion.

Touching upon the economic growth rate in Iran, estimated at 5 percent this year, it would bring about positive prospect for the country to lure foreign investments.

Iran is an eye-catching and lucrative market for several European countries like Germany offering not only 80 million people it has but also a 400-million-people market it can provide access to.Iran-EU Economic Center in Germany

On May 2016, in an indication of warming economic relations between Iran and European countries, particularly Germany, Iran-EU center for economic cooperation was opened in Germany.

Iranian officials believe that the center can serve as a turning point in fostering Tehran-Berlin economic ties and would present the opportunity for a fresh round of cooperation between Iran and western countries, mainly Germany.

As long as, there is no political restriction for amending economic cooperation between the Iranian and European companies, the center could pave the ground for expansion of more economic relations.

 

Iranian Private Banks in Germany

On September 2016, Deutsche Welle reported that Iran's Middle East Bank and Sina Bank will open branches in the Bavarian city of Munich by the end of the year; Iran's central bank has dubbed it a development that could help boost German exports to the Islamic Republic.

Ilse Aigner, Bavaria's economy minister, told the Münchner Merkur newspaper that the new Iranian bank branches would help German businesses realize greater exports to Iran.

On May 2016, in an indication of warming economic relations between Iran and European countries Iran-EU center for economic cooperation was opened in Germany.Aigner said having branches of Iranian banks in Munich is particularly important for our businesses; especially our small and medium-sized firms have enormous export prospects to Iran that they will be able to utilize more easily in the future.

On May 2016, Iran awarded a major contract to the German company Abels Decker Kuhfuß Lenzen (ADKL) over the development of a petrochemical project in the country’s southwestern city of Masjed Soleyman an initial value of €2 billion which will be increased to as high as €10 billion in the future.

As per the contract, the ADKL will cooperate with Masjed Soleyman Petrochemical Industries Company over providing the funds, transferring the technology and implementing contracts for the project within the framework of engineering, procurement, construction and finance (EPCF).

 

While Germany is practically the propelling engine of European economy and enjoys the most stable economy in the green continent, it can now play the leading role in renovation of relationships between Iran and European countries. Although banking transactions are not freed completely due to US pressures and threats, economic negotiations have marked significant rise and many MoUs and contracts have been signed since the implementation of nuclear deal. Berlin must take this opportunity in its best way and pave the way for better economic ties between Iran and Germany as well as other European states. 

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TEHRAN, Oct. 02 (MNA) – The first Thai Airways flight landed touched down on Imam Khomeini International Airport (IKIA) at 19:00 local time on Saturday.

Thai Airways marks the 56th airliner which is performing flights to Tehran’s IKIA.

Prin Yooprasert, Director Route Management – Australia, Africa and M.E. Department of Thai Airways International Public Company Ltd said during the opening ceremony that “Boeing 777-200 flew from Bangkok to Tehran on Saturday.”

“Currently, four flights per week are scheduled and we hope that daily flights will be performed in near future,” he continued.

Yooprasert noted that the launch of the new flight route can help further develop economic ties between Iran and Thailand which will in turn increase the number of flights between the two sides.

The official underlined that Thai Airways possesses 96 passenger aircraft which fly to 80 international destinations.

“Presently, flights are made to Tehran while in future they will be landing in Mashhad and Isfahan as well,” said Yooprasert.

Founded in 1960, the Thai Airways enjoys an average fleet age of below 12 years and was named as the world’s best airliner in the year 2006.

Presently, Iran's Mahan Airline Company operates six flights each week via the same route and given the four flights by Thai Airways, the total number of flight will reach ten.

 

HA/IRN82251884

 

 
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there is no more room for hesitation when it comes to the unification of forex rates," Masoud Khansari was quoted as saying by khabaronline.ir news website.

Single currency rates are a crucial requirement for the reintegration of Iran into the global banking system and payment networks.

come on baby! 

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As to any other major conditions needed for implementing the currency unification plan, Khansari said no special conditions are required. "Actually it is the process of interfering with forex rates and employing a dual rate system that requires unique circumstances," he added. "Like any other commodity, forex rates must be allowed to float and endure in the market based on the mechanism of supply and demand."

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Bank Maskan, specialized in lending to the housing sector, will start repayment of its debt s to the Central Bank of Iran worth 550 trillion rials ($17.4 billion) from 2023. The CBI had allocated the money in credit to the key lender. Maskan borrowed from the regulator to finance the controversial Mehr Housing Project from 2008 to 2015.  “Homebuyers had settled part of the money by 2015,” Ali Asghar Mir Mohammad Sadeqi, CBI’s head of Credit Department was quoted as saying by banker.ir on Saturday. However, the central bank allowed the bank to use the money for development of the massive project. Bank Maskan is set to repay the debt in ten years, according to the official. The Mehr project is a large-scale construction program initiated in 2007 by the previous administration to provide two million low-income people with housing through free land and cheap credits.

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  1. World Economy
Sunday, October 02, 2016

Yuan Joins SDR Basket

China’s central bank says the yuan’s SDR inclusion is “a milestone in the internationalization of the yuan” and “a recognition of China’s progress
 
 

China's currency renminbi, or the yuan, officially joined the elite reserve currency basket of the International Monetary Fund, in its latest step on its way to becoming a global currency.

The IMF on Friday announced the launch of its new Special Drawing Right basket, including the yuan, effective from Saturday, saying it was a "historic milestone" for China, the IMF and the international monetary system, Xinhua reported.

The inclusion makes the yuan one of the five reserve currencies fully endorsed by the 189-member organization, joining the US dollar, the euro, the Japanese yen and the British pound.

The executive board of the IMF decided the weight of each currency in the new SDR basket on Friday, with the US dollar at 41.73%, 30.93% for the euro, 10.92% for the yuan, 8.33% for the Japanese yen and 8.09% for the British pound.

Analysts said that while there will be several long-term implications of the yuan's SDR inclusion, the impact will be limited in the short term.

"Currently $285 billion is allocated to SDR members, and the yuan's inclusion would lead to capital flows of $31 billion for direct SDR allocation," Nathan Chow, DBS Bank's economist, estimated.

Data suggests that central banks around the world might have already started to re-allocate reserves. Cumulative foreign institutional flows into yuan treasury bonds reached an all-time high of 321.9 billion yuan ($48.5 billion) in July, up 28% from January this year, according to a report by DBS Group Research.

Tiny Purchase

Alicia Garcia Herrero, chief economist for Asia Pacific at NATIXIS, argued that central banks' expected purchases of the yuan to comply with the SDR basket would be tiny. "Only if central banks increase their investment in the yuan beyond the required amounts for SDR, will it make a difference to China's thirst for capital inflows," she said.

Zhu Haibin, China Chief Economist at JPMorgan, forecast that reserve managers might gradually increase holdings of yuan-denominated assets, possibly reaching 5% (or a net inflow of $350 billion) in five years. A Standard Chartered Bank report expects that the yuan will comprise 5% of global reserves by the end of 2020.

While some investors have speculated there might be a fast depreciation of the yuan after its SDR entry, Zhu regarded the probability of this scenario as very low, adding that the statement from the Chinese authorities that "there is no basis for long-term depreciation" should be taken seriously.

In the short term, the depreciation of the yuan may be unavoidable as China will allow the exchange rate of the yuan to be increasingly determined by market forces, but there is no need to worry about the yuan's depreciation in the long run as "the Chinese economy is still growing rapidly relative to other economies, with active FDI and outbound investment, as well as abundant foreign exchange reserves," said Grace Yu, counsel at Linklaters law firm.

More Needs to Be Done

In a statement released hours after the IMF announcement, the People's Bank of China, the central bank, called the yuan's SDR inclusion "a milestone in the internationalization of the yuan" and "a recognition of China's progress in economic development as well as financial reforms and an opening up."

Yet the yuan's SDR entry is not where it ends. It is more likely to be used as a catalyst than reason to end China's capital account opening and ongoing domestic financial reforms, UBS economists Donna Kwok and Wang Tao said in a report.

More work should be done to increase the availability and liquidity of investable yuan assets, advance the development of onshore financial markets and hedging instruments, and minimize perceived risks associated with Chinese policies, especially the exchange rate of the yuan, they said.

The yuan was the fifth most active currency for global payments by value in July, with a share of 1.9%, an increase from 1.72% in June, according to data from global transaction services organization SWIFT.

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“Foreign exchange rate relates to both manufacturers and consumers and a rise in the major currencies’ value is beneficial in one place and disagreeable in another,” Al-e Es’haq said.

“The exchange rate should be at the optimal point for the key players so that importers, exporters, the government and consumers feel at ease.”

While acknowledging that a dual exchange rate leads to corruption, Al-e Es’haq argued that if essential commodities are imported at the market exchange rate, a large segment of the society would incur losses.

“Although it is important that supply and demand determine the value of foreign currencies, a regulated market can protect the economy against fluctuations,” he maintained.
Other commentators also rooted for a unified exchange rate, which they said would support domestic manufacturing and the job market.

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17 hours ago, gixxerfrog said:

I took it as instead of the dual rates it will be just one, not 1:1  right now there is a street rate and a cbi rate. I can't see them going to 1:1 even after they rv, I'm hoping for around 10 cents.  I still think we have some time yet before this pops....hopefully not too much longer though lol.

I totally agree frog !! Anything higher than a dime may very well put some of us into Cardiac Arrest !! LOL.  :mexican:

pp

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14 hours ago, screwball said:

Got no idea....what are your thoughts?

 

14 hours ago, blueskyline said:

Humor me ..........Lets just say they wanted to be pegged to the SDR now that China is in it and its as Stable as people say it is now with the Yuan inclusion. What sort of parity would it have to the SDR ?

I'm going to take a stab at it and say maybe the mean average of all of them ? Not sure exactly how to calculate but with 100% + $1.00 than it could well be .20 ?

Just a W.A.G.  pp

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Iran is looking to link bank cards with Iraq
Ali Abdul Salman 44[ltr]  02/10/2016[/ltr]

57f0f706c8edf.jpg





 

Governor of the Central Bank of Iran announced Waliullah sword, he has been getting positive results regarding the establishment of bank cards to local banks negotiations with Pakistan, Azerbaijan and Iraq. 
He explained sword at the International Investment Forum Iran 's tourism sector released his works on Sunday in Tehran, that there is a forward - looking vision favorable regarding facilities for foreign tourists and that the central bank conducted negotiations on theJapanese, Chinese, Russian and international cards, and it 's in the process of final results. on 
the other hand between the Governor of the Central Bank of Iran that the banking ties have evolved since January, and that the exchange rate policy pay trend gradually toward unifying the price the official exchange rate with the market. 
He said that the unification of the foreign currency exchange rate, will be achieved until March 20 / March 2017

 

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Iran says it will offer a tax break of 13 years to hoteliers in what appears to be part of a policy devised to promote the country’s tourism industry. 

"All economic activities related to... tourism will enjoy 100 percent tax holidays between five to 13 years depending on the region," AFP quoted Iran’s Deputy Economy Minister Mohammad Khazaei as saying at an international tourism summit in Tehran. 

Visitor numbers have already boomed in recent years, rising from 2.2 million annually in 2009 to 5.2 million in 2015, AFP added.

Iran has an ambitious target to increase annual visitor count by five folds to 20 million by 2025 in order to generate $30 billion a year. On the same front, the media reported last December that the country is constructing 125 new four- and five-star hotels.  

This has already encouraged international hoteliers to devise plans to invest in Iran’s hotel industry. Hotel groups in the Persian Gulf Arab states are specifically believed to have already taken measures to boost their portfolios in Iran. 

Hotel groups from Germany, Greece, South Korea and Singapore have also engaged in talks with officials in Tehran over hotel construction plans.

Europe’s largest hotel group Accor has also constructed two four-star hotels at Imam Khomeini International Airport outside the Iranian capital.

The UAE-based Rotana plans to open its five-star 600-room hotel in Tehran this year and another in the pilgrimage city of Mashhad.

Also, officials in Ankara announced in May that the country’s investors will be allowed to build at least 10 hotels in Iran. The hotels would be built in Tehran, Isfahan, Shiraz, Tabriz and Mashhad.

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