Iranian Rial

[screwball]

http://www.intellinews.com/iran-central-bank-proposes-two-major-banking-reform-bills-102773/

[screwball]

Banking reform bills in Majlis by mid-August: CBI governor

1. Economy

July 24, 2016

 

TEHRAN - Two proposed bills aiming at banking system reform have been prepared and will be sent to the parliament (Majlis) by the end of the current Iranian calendar month of Mordad (August 21), IRNA quoted Central Bank Governor Valiollah Seif as saying on Sunday.

“The two bills have been drafted in line with the country’s financial and monetary reform plan and after being approved by the government they will be presented to Majlis,” he added.

Determining various types of banking operations and services, establishing branches of foreign banks and assessing foreign banks’ shares, determining the structure of bank shares in terms of individual ownership and classification the banks, requiring credit institutions to provide correct information, setting standards to select professional banks’ CEOs and board members and setting up risk and internal audit committees are among the features of the banking reform bill.

Earlier this month, President Hassan Rouhani announced that banking reform as the most important financial and monetary plan to foster economic growth will start in the current Iranian calendar year.

The reform plan prioritizes domestic production, creating jobs, reducing unemployment, developing economy and tackling recession.

 

 

EF/MG

[screwball]

 

Bills on Iranian banking reforms to be submitted to Majlis

Tehran, July 24, IRNA – Governor of the Central Bank of Iran (CBI) Valiollah Seif said on Sunday that two bills for reforms of Iranian banking system and of Central Bank of Iran will be submitted to Majlis this month.

 

Seif said on Sunday that the bill on Iranian banking is the same as the bill on reforms of the usury-free banking law.

He noted that the two bills are compiled to reform and change the banking system and in case of cabinet approval will be submitted to Majlis.

The bill on Iranian banking law which will substitute current usury free banking law explicitly defines bank and non-banking credit institutes license of which is issued by the CBI.

The bill envisions A to Zs of various banking operations and services, establishment and formation of foreign banks, the amount of shares held by foreign banks, share structure of banks in terms of private ownership and classifications, mandating institutions to provide sound information at time of formation of credit institutes, professional regulations for election of managing directors, members of board of governors of banks and institutions, formation of the risk committees and domestic audits and the regulations’ correspondence office.

1420**1771

[gregp]

With all the new contracts of foreign trade being thrown at them, i imagine Iran is scrambling to get their banking up to par QUICKLY. Maybe Iran learned from Iraqs mistakes. Keeping the governments grubby hands out of the cookie jar!!!

Thanks, Screwballs!!

[pokerplayer]

8 hours ago, screwball said:

1. National

Sunday, October 09, 2016

Canadian PM Slams Predecessor for Cutting Iran Relations

 

Canadian Prime Minister Justin Trudeau criticized the former conservative government for its decision four years ago to cut diplomatic ties with Iran, which he said was made on "political and ideological" grounds.

Trudeau was speaking with reporters in a media session in Toronto on Friday, CBC reported. In September 2012, the administration of the former Canadian prime minister, Stephen Harper, severed diplomatic contacts with the Islamic Republic, citing, among other pretexts, "continued threats from Iran to Israel".

Canada shut its embassy in Tehran and ordered Iranian diplomats to leave the North American country within five days.

The Italian Embassy has been handling Canada's interests in Iran since then. However, Trudeau came to office in the 2015 election on a promise of change, including changes in foreign policy.

He has expressed willingness on several occasions to see Canada's Embassy reopen in Tehran and in February, his liberal government announced it was lifting some sanctions against Iran.

  Right Signal

"I think Canada is sending the right signal" by deciding to partially remove the sanctions, Trudeau said in March, adding that Canada needs to engage with nations that it believes pose a security challenge to the world.

"You need to have opportunities to put pressure, to tell them where they're going wrong, to tell them how to start going right ... You don't get to do that by crossing your arms and shouting indiscriminately and hoping they hear," he said.

In April, Canadian Foreign Minister Stephane Dion acknowledged that the break in relations "had no positive consequences for anyone: not for Canadians, not for the people of Iran, not for Israel and not for global security".

"Canada's Embassy in Iran has been closed for over three years. With which results? Is it right to need to count on Italy to protect our interests in this country?" Dion asked. "Today, Canada must return to Iran to play a useful role in that region of the world … We are being asked by all sides to reengage and we are doing so."

Later on June 10, he confirmed to CBC News that official-level talks with Iranians aimed at normalizing relations had started.

Iranian expatriates living in Canada have filed a petition containing more than 5,600 names to push for the resumption of Tehran-Ottawa ties.

 

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Heard about all this awhile back.Lots of discussion and heated arguments. Trudeau wants excellent Global ties with virtually all countries, some which were damaged by past PM's.

All in all not a bad thing

pp

[Freedomwish]

Awesome, just awesome new scoop coming around.  Keeping the faith indeed!! 

[screwball]

1. Economy
2. Business And Markets

Sunday, October 09, 2016

Tayyebnia, Turkey’s Simsek Meet in Washington

 

The minister of economy has called for greater momentum in economic and banking ties between Tehran and Ankara.

“Iran’s banking industry is willing to increase correspondent relations with Turkish banks. I hope that based on recent agreements, the process of collaborating with Turkish banks would gain speed,” Ali Tayyebnia told the deputy prime minister of Turkey in Washington,  Exim News reported.

The minister, who is in Washington to take part in the annual meetings of the International Monetary Fund and the World Bank Group, pointed to successful collaboration between Iran and Turkey in trans-border business deals in the past.

“To accelerate the process of doing business with Turkey, Iran is ready to go beyond the single-window clearance system and move toward creating a joint cargo clearance mechanism that we are convinced can create the grounds for a fundamental evolution in two-way commerce.”

Mehmet ?im?ek, the Turkish deputy premier, welcomed the proposal and Iran’s willingness in developing joint efforts to improve customs and business procedures.

“We are indeed ready to expand customs collaborations between the two countries and are of the belief that this could be a significant move toward increasing bilateral business,” ?im?ek was quoted as saying.

Pointing to the cultural and political ties between the two neighbors, the Turkish official appreciated the stance of the government in Tehran preferring the expansion of bilateral commerce. He noted that the volume of investments and business deals between Iran and Turkey “is in no way proportional to the level of two-way political ties.”

?im?ek said Turkey is ready to share its valuable experience regarding funding the private sector in production ventures.

Emphasizing the need for the expansion of banking ties, he said the groundwork has been laid for some major Turkish banks to establish correspondent relations with their Iranian counterparts. “The banks will soon elevate their ties with Iranian banks to the operational level.”

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TEHRAN (Tasnim) – A spokesman for US mobile phone company AT&T said it has signed an agreement with an Iranian mobile phone operator to provide voice calls and data services to customers in the Islamic Republic. 

According to a report carried by the New York Times on Saturday, Iran’s RighTel and AT&T signed the cooperation document last week, which will allow voice calls, text messaging and data service between Iran and the US.

The American company has now included Iran on the list of its countries and customers will be charged $3 for a one-minute call to Iran.

A spokesman for RightTel has reportedly confirmed the report.

Prior to this, mobile phones with American SIM cards could not receive any sort of signal in Iran and vice versa.     
 
 

[screwball]

The U.S. Treasury Department, Office of Foreign Assets Control (OFAC)
 

The U.S. Treasury Department said on October 8 that an update to its regulations that was published late on October 7 merely clarifies what is and is not allowed since last year's landmark nuclear deal gave Iran billions of dollars in sanctions relief in exchange for limits on its atomic program.

The Treasury said in a statement that the update was "intended to clarify the scope of sanctions lifting under the [nuclear deal] and the sanctions that remain."

It said the guidelines do not represent any additional sanctions relief.

The clarifications specify that some previously prohibited transactions in U.S. dollars with Iran by offshore banks are now allowed as long as they do not enter the U.S. financial system.

The U.S. still maintains sanctions on Iran and some Iranian firms and people for various reasons -- including Iran's ballistic missile program, human rights abuses, and support for groups listed by the United States as terrorist organizations.

[screwball]

Publish Date: Fri, 07 Oct 2016 19:21:07 GMT

Service: Iran

 

 

Official forex rate needs to rise

Central Bank of Iran (CBI) has once again announced that it is planning to unify foreign exchange rates by March 20, 2017.

The imposition of anti-Iran sanctions during the second term of former president Mahmoud Ahmadinejad (2005-2013) pushed his government to introduce a multi-tier exchange rate system. This depreciated the value of the national currency by 400 percent against hard currencies in the open market.

Since taking office in August 2013, the government of President Hassan Rouhani has vowed to do away with the multi-tier system and replace it with a unified system.

At present, Iran has both an official exchange rate and an unofficial market rate that is used in exchange houses. The rial trades at about 36,000 per US dollar on the open market against the official rate of around 31,500.

A unified foreign exchange rate will be a major step toward effectively floating the national currency. It will also pave the way for boosting economic transparency which is considered essential for attracting foreign investment.

Since last year the official rate of per US dollar has increased by 2,400 rials while the open market rate has witnessed a rise of 2,950 rials.

This shows that a rise in the official rate will push prices up in the open market.

If the government wants to press ahead with a gradual increase in the official rate it will fail to implement a unified forex rate within the specified timeframe of March 2017.

Hence, the administration should further boost the official rate or adopt mechanisms to stem higher open market rate.

If the government seeks to regulate such mechanisms, it should pay attention to the "realities of the market".

The foreign exchange market is directly impacted by "the supply-demand process" as well as "the country's foreign exchange earnings".

The value of hard currencies against the rial has increased since 2013, but this has mismatched the inflation rate.

In other words, the inflation rate has been higher than the rise in the foreign exchange market. As a result, the government further needs to boost the official exchange rate to offset growth in inflation rate. A single-digit inflation rate has been recorded over the past months, which has raised hopes for achieving a unified forex rate.

Besides, foreign exchange earnings must go up to enable the CBI to meet the needs of the forex market.

Unless responsible bodies study such realities in the market, they will fail to unify foreign exchange rates. Even if a unified system is realized, it may not remain in place without taking such realities into consideration.

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[screwball]

Norway opens $1b credit line to facilitate exports to Iran

Norway’s Foreign Minister Borge Brende announced that his country has opened a one-billion-dollar credit line for Norwegian companies’ exports to Iran.

About $400 million of that credit line has been used to export modern technologies to Iran, Brende said in a meeting with Iran’s Minister of Finance and Economic Affairs Ali Tayyebnia, IRNA reported.

The meeting was held on the sidelines of the 2016 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group in Washington D.C. on October 7-9.

Iran is a good trade partner due to its political stability and economic growth, Brende added.

Brende said his country encourages Norwegian companies, banks and financial institutions to cooperate with Iran.

He added that DNB, Norway’s largest financial services group, is due to be active in Iran’s market.

The Iranian finance minister said Tehran is willing to expand relations in different economic areas with Oslo.

Tayyebnia said he hoped that hindrances on the way of bilateral cooperation would be removed in the near future.

Oil, gas and fisheries are among the topics on which Oslo and Tehran can focus, Tayyebnia said.

In the sanctions era, the presence of the Norwegian oil companies faded away, Tayyebnia said, hoping that the two would resume cooperation as anti-Iran sanctions were lifted in January 2016.

He stressed the importance of the implementation of mutual agreements in order to promote the level of bilateral cooperation.

Tayyebnia further described banking cooperation as an important area for facilitating trade.

[screwball]

Talks almost finalized between Iranian automaker, Mercedes-Benz

1. Economy

October 9, 2016

 

TEHRAN- Mansour Moazami, the Iranian deputy industry, mine and trade minister, announced that an Iranian auto manufacturer has conducted some negotiations with the German giant automaker Mercedes-Benz last week and the talks on mutual cooperation are almost finalized, Tasnim news agency reported on Sunday.

The automotive sector is the second biggest sector in Iran and according to the World Bank it accounts for 10 percent of the country’s GDP and 4 percent of its workforce.
Auto industry was one of the sectors most hurt by the West-led sanctions against Iran. Now, following lifting of the sanctions in January, Western automakers are looking to seize upon the opportunity in the country.

MA/MG

[screwball]

Tehran, Bangkok could double trade soon: Rouhani

1. Economy

October 9, 2016

 

TEHRAN - President Hassan Rouhani has said Iran and Thailand could double bilateral trade in the near future by implementing agreements and joint projects.

He made the remarks in a meeting with Thai Prime Minister Prayut Chan-o-cha in Bangkok on Sunday.

During the meeting, Rouhani underlined the need to facilitate banking cooperation between the two countries as a means to foster economic ties, president.ir reported.

He added that both sides are taking preparatory steps to sign a preferential trade agreement.

Iran and Thailand are apt to boost trade in oil, gas, petrochemicals, fishery, road construction, automobile parts manufacturing, and agriculture sectors, Rouhani noted.

Thailand can serve as a bridge to connect Iran to East Asia, he said, adding, Iran can be the best gateway for Thailand to get access to Central Asia, Caucasus and Europe.

Rouhani asserted that the two countries are better to resume direct flights to ease mutual ties in the field of tourism.

Chan-o-cha, for his part, stressed that the Thai government is resolved to boost cooperation with Iran and noted that educational, cultural and scientific ties between the two sides should be expanded at the same pace with political and economic ties, Shana news agency reported.

President Rouhani’s visit to Thailand is part of his Southeast Asian tour that took him to Vietnam and Malaysia earlier this week.

‘Iran-Thailand trade can hit $10b’

Meanwhile, Gholam-Hossein Shafe’i, the chairman of Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) has said probabilities are high for both countries to boost trade up to $10 billion in the future.

“The Islamic Republic has just a $99 million share of Thailand’s $200 billion market, and Thailand’s stake in Iran’s $78 billion market is just $115 million,” ICCIMA website quoted Shafe’i as saying on Sunday.

Addressing the Iran-Thailand business forum in Bangkok, Shafe’i said, “Iran can export bitumen and oil derivatives as well as copper and chemical fertilizers to Thailand and import auto parts, agricultural, technological, and electronic products.” 

The Iran-Thailand business forum was attended by President of The Thai Chamber of Commerce Kissana Vongsay, a representative from Iran Central Bank, and an economic representative from Iranian embassy in Thailand.

During the meeting, the two sides explored ways to expand economic ties in the future and agreed to form a committee to follow up relevant issues. A list of goods possible for future trade between the two countries is also to be prepared, accordingly. 

HJ/MA/MG

[markb57]

another policy change for  US

https://ihavethetruth.com/2016/10/09/while-we-were-all-distracted-by-trump-obama-did-another-sneaky-friday-dump/

 

NEW POSTS

While We Were All Distracted By Trump… Obama Did Another Sneaky Friday Dump

By Terresa Monroe-Hamilton | Oct 9, 2016

0 COMMENTS

 

Perfect… just freaking perfect. While the entire nation was mired in the ongoing scandals of Donald Trump and the corruption of Hillarious Clinton, Barack Obama continued to support and aid our enemy, Iran. Because you can never do enough for the world’s number 1 sponsor of terror… Brit Hume seems to be the only one who has nailed him on it. Obama further eased sanctions on Iran on the Friday before Columbus Day.

This is the easing of banking restrictions so Iran can more easily fund their operations and terroristic ways. Obama’s move makes it easier for those known to deal with terrorists to conduct financial transactions. US businesses will now be able to wheel and deal with the Mullahs… don’t mind the blood and heads on the carpet.

From BizPac Review:

While everyone else is focused on what Donald Trump said eleven years ago(and why is Hillarious trying to claim the moral high ground anyway?), the Obama Administration figured hey, why not take an under-the-radar shot at making life easier for one of the world’s most prominent sponsors of terror.

Fox News senior political analyst Brit Hume caught it and posted the details on Twitter:

Apparently, the idea is to make it easier for U.S. businesses to do business in Iran.

Before the start of the Columbus Day holiday weekend, the Treasury Department made it easier for offshore banking institutions to make transactions with Iran, as long as the money doesn’t actually enter the U.S. financial system. Although many sanctions were lifted as a part of the Iran deal, certain “specially designated nationals,” or SDNs, are still subject to the sanctions for reasons which include their human rights record or support for terror groups.

Now, even these SDNs are no longer completely banned from transacting with U.S. businesses.

You might ask why he did this… the AP has an explanation of sorts:

Friday’s steps by the Treasury come amid growing complaints from Iran that it is not getting the sanctions relief it deserves under the nuclear deal because remaining U.S. sanctions have scared foreign companies from doing business in or with the country. The U.S. insists it has met its obligations and blamed Iranian behavior for the reluctance of foreign companies do to business in Iran. At the same time, it has sought to reassure foreign companies that certain transactions with Iran will no longer be subject to U.S. sanctions.

 

According to Obama, if Iran ain’t happy, no one is. I bet he goes through a lot of pants kneeling before the Iranians. I’m sure this is not the end of Obama’s gifts to Iran either. He wants them involved in our financial and banking sectors, so this is his first push towards that. If it walks, talks and kneels like a Muslim… Meanwhile, we swim in the cesspool of American politics.

 

Edited October 10, 2016 by markb57

[screwball]

http://www.al-monitor.com/pulse/originals/2016/10/iran-finance-minister-resilient-economy-sanctions-investment.html

quitely without fanfare within 2 months I like it!

[screwball]

He said the differential between the official rate of the rial and the market rate is now 14% and predicted it would shrink further. A “big bulk of goods which were purchased using the official rate are now being traded using the market rate,” Tayebnia said. “In the course of the next two months, the share of the official exchange rate [in trading goods] will be zero. We are very smoothly and gradually doing that reunification without having lots of rhetoric and propaganda about it.”

Read more: http://www.al-monitor.com/pulse/originals/2016/10/iran-finance-minister-resilient-economy-sanctions-investment.html#ixzz4MedLyKjP

[screwball]

 

Iran committed to boost ties with EU: Minister

Tehran, Oct 10, IRNA – Iran is committed to boost ties with European states, Iran's Minister of Economic Affairs and Finance Ali Tayebnia said.

 

He made the remarks in a meeting with French Finance Minister Michel Sapin on the sidelines of annual meetings of the International Monetary Fund and the World Bank Group in Washington on Sunday.

The Iranian economy minister underlined Iran’s commitment on boost of ties with the EU and said that the European sides of nuclear talks should provide brokerage services to the Iranian banks according the JCPOA.

Iran and France have lots of potentials for cooperation, Tayebnia added.

Referring to the improvement of Iranian economy in the post-sanctions era, the economy minister said that France is a big country that can use its influence for removal of US-imposed restrictions on Iranian banks.

Iran is a pioneer in the region in fight against terrorism, Tayebnia underlined.

He said there is consensus among all decision makers that development of economic cooperation in the international system and removal of poverty is one of the major ways of combating terrorism and violence.

9191**1771

[screwball]

President Calls for Closer Strategic Ties with China after Iran Nuclear Deal 

News ID: 1209314 Service: Economy 

 October, 10, 2016 - 11:28 

TEHRAN (Tasnim) – Iranian President Hassan Rouhani underlined that the Islamic Republic and China should use the opportunities created after the July 2015 nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), to boost their ties in all areas. 

Speaking at a meeting with Vice President of China Li Yuanchao in Thailand on Sunday, President Rouhani said relations with Beijing have always been very important to Tehran, adding that he is willing that the two counties use the post-JCPOA opportunities to quickly realize “strategic” relations.

He further stressed the need to expand banking ties between the two countries, saying that Iran welcomes China’s investment in various sectors of oil and gas, transportation, technology.

The Iranian president added that the two countries can also promote cooperation in scientific and cultural spheres.

Li, for his part, said that a new chapter has been opened in the history of relations between Iran and China, adding that his country welcomes closer cooperation with the Islamic Republic in all spheres.

The remarks come against the backdrop of a new wave of interest in ties with Iran after Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) on July 14, 2015 reached a conclusion over the text of a comprehensive 159-page deal on Tehran's nuclear program and started implementing it on January 16.

The comprehensive nuclear deal, known as Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions imposed on Iran.

R1016170/P42329

[screwball]

President Rouhani said relations with Beijing have always been very important to Tehran, adding that he is willing that the two counties use the post-JCPOA opportunities to quickly realize “strategic” relations.

[screwball]

U.S. Political Debate Said To Cast Shadow Over Iranian Nuclear Deal

Source: RFE/RL

The landmark nuclear agreement between Iran and world powers remains "fragile" in part because it has become a focus of dispute in the U.S. presidential election, the head of the United Nations agency that polices the deal said.

U.S. Republican and Democratic presidential candidates Donald Trump Hillarious Clinton
(artwork by Iranian cartoonist Hadi Heidari)
 

"Small technical mistakes, small failures in implementation can become big political issues that could have a large negative influence on the agreement," International Atomic Energy Agency chief Yukiya Amano told dpa in an interview published on October 7.

Amano said that Iran so far has complied with the agreement by limiting its stockpile of enriched uranium and the number of centrifuges, machines that enrich uranium, all in exchange for the lifting of western economic sanctions in January.

While U.S. Democratic presidential candidate Hillarious Clinton supports the deal, her Republican opponent Donald Trump has strongly criticized it and vowed to tear it up if elected.

The unanimous U.S. Republican opposition to the deal has fueled similar opposition from conservative forces in Iran.

"There is little trust" between the Washington and Tehran, Amano noted.

Based on reporting by dpa and AP

[screwball]

Better make your currency internationally traded then! And quickly!

[screwball]

Attracting investors to the Iranian capital markets has long been a challenge, as international investors have been scared off by sanctions and the reputational risk of doing business in Iran.

This is true even for domestic counterparts who have found it more profitable to keep their money in banks than in the more volatile stock market, writes Euromoney.

Yet the outlook is changing for both groups. Could Tehran Stock Exchange be on the cusp of a breakthrough?

The appeal for many investors in TSE and Iran Fara Bourse over-the-counter market is largely tied to the difference between bank deposit rates and the returns they can expect from investments in listed companies.

That gap has been narrowing, most recently in June when the Central Bank of Iran cut the one-year deposit rate from 18% to 15%, still an astronomical level for most markets. However, interest rates in money markets are still higher.

“Interbank borrowing rates are still at 20% and banks still offer 20% interest on large deposits (over $14 million),” said an Iranian investment banker that did not wish to be identified. This is while dividend yields are at 12%, according to Turquoise Partners, a Tehran-based investment firm.

  Shifting Landscape

For foreign investors, the big change was the Joint Comprehensive Plan of Action in January to lift most sanctions, in return for Tehran scaling back its nuclear energy program. Invariably, those coming to Iran find the puzzle that is more complex than they might like, but the pieces are gradually falling into place.

“The United States further eased financial sanctions on Iran through regulatory measures that could significantly bolster Tehran’s ability to access global financial markets and attract foreign investment,” the Wall Street Journal reported on Saturday.

But one sticking point has been the relatively high cost of bank transfers, but this is also set to change. Until recently, bank transfers had to be based on the official exchange rate, which in early August was running at 30,900 rials to the dollar, around 14% more expensive than the market rate of 35,344 rials.

However, in late July, the central bank said it would allow banks to offer the market rate on foreign exchange transactions, which should mean that more investment will flow into the country through the banks.

“This is very significant, as it should allow large FDI to come into Iran more easily,” says Kiyan Zandiyeh, portfolio manager for London-based Sturgeon Capital, which operates an equity fund investing in listed Iranian companies.

In the medium term, the central bank has vowed to close the gap between the two rates and end the system of parallel exchange rates, either later in 2016, or at least by the end of the current Iranian year, which falls in March 2017.

Instead of using banks, other investors have preferred to transfer money into Iran via exchange houses–credit institutions regulated by the central bank that can facilitate cross-border money transfers.

  Certainty of Growth

There is certainly the potential for the Iranian economy to grow quickly, but its short-term fortunes rely on domestic and international political issues, which are hard to predict. For one thing, the outcome of Iran’s presidential elections in May 2017 will set the template for the country’s relations with the outside world for years to come.

The IMF suggests GDP will expand by 3.7% to 4.5% between now and 2021. Others are more bullish, predicting growth rates between 6% and 8%.

There are a few reasons why some companies should grow quickly in the coming years, even if the economy as a whole does not match the highest hopes.

For one thing, many Iranian businesses have been operating below capacity during the sanctions years and, with the shackles now removed, they should be able to expand their output even without much investment. For companies that were more productive, expansion plans that had been put on hold can start to move forward.

Turquoise predicts that listed companies will post earnings growth of around 10% on average over the year to March 2017.

The biggest boost of all could come from Iran’s inclusion in international indices, such as those run by MSCI.

Zandiyeh believes that, based on the size of TSE, it “should conservatively occupy between 25% and 30% of the MSCI Frontier Index. Looking at the money which tracks the index, up to $7 billion to $10 billion would have to enter the market. That could happen in the next year or two.”

  Outdated Rules and Infrastructure

Beyond the problems of scarce banking links and parallel exchange rates, there are further concerns for investors, as a consequence of the relatively immature nature of the market and because it has been separated from the international mainstream for so many years.

Local regulations stipulate that stocks cannot be held by a global custodian, but instead must be held by the Central Securities Depository of Iran. This month the market regulator issued new directions, allowing local banks to act as custodians for large investors. The SEO claims this will alleviate concerns.

Furthermore, there are no credit ratings agencies working in Iran, nor a culture of analyst reports and coverage.

Financial reports and other data are often only available in Persian, and global accounting norms, such as international financial accounting standards, are only starting to be introduced. All this makes it harder to evaluate companies for investment. Instead, investors will have to rely on the forward guidance that companies issue and their own research into a company’s performance and prospects.

  A Wager for the Future

Some of these concerns are being addressed and there have been signs that the market is moving to become more professional, with a wider range of tools on offer to investors.

Macroeconomic trends in Iran ought to drive more investors toward the market too, helping improve liquidity levels, which are another concern, particularly for many of the smaller stocks.

Bonds on the other hand are underwritten by the banks in Iran, carry high fixed interest rates for multiple years and can always be redeemed for at least their par value. That means investors can lock in high double-digit returns for several years.

Clemente Cappello, chief investment officer of Sturgeon Capital, says, “Nearly $10 trillion in global bonds trade at negative yields, whereas in Iran the yields are 18% to 20%. GDP is rising and the population is young—60% are under the age of 30—while it is aging in the west. It makes for an interesting situation for investment.”

The question is how quickly will international investors be willing, able or brave enough to take advantage of those trends?

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12 hours ago, screwball said:

Publish Date: Fri, 07 Oct 2016 19:21:07 GMT

Service: Iran

 

 

Official forex rate needs to rise

Central Bank of Iran (CBI) has once again announced that it is planning to unify foreign exchange rates by March 20, 2017.

The imposition of anti-Iran sanctions during the second term of former president Mahmoud Ahmadinejad (2005-2013) pushed his government to introduce a multi-tier exchange rate system. This depreciated the value of the national currency by 400 percent against hard currencies in the open market.

Since taking office in August 2013, the government of President Hassan Rouhani has vowed to do away with the multi-tier system and replace it with a unified system.

At present, Iran has both an official exchange rate and an unofficial market rate that is used in exchange houses. The rial trades at about 36,000 per US dollar on the open market against the official rate of around 31,500.

A unified foreign exchange rate will be a major step toward effectively floating the national currency. It will also pave the way for boosting economic transparency which is considered essential for attracting foreign investment.

Since last year the official rate of per US dollar has increased by 2,400 rials while the open market rate has witnessed a rise of 2,950 rials.

This shows that a rise in the official rate will push prices up in the open market.

If the government wants to press ahead with a gradual increase in the official rate it will fail to implement a unified forex rate within the specified timeframe of March 2017.

Hence, the administration should further boost the official rate or adopt mechanisms to stem higher open market rate.

If the government seeks to regulate such mechanisms, it should pay attention to the "realities of the market".

The foreign exchange market is directly impacted by "the supply-demand process" as well as "the country's foreign exchange earnings".

The value of hard currencies against the rial has increased since 2013, but this has mismatched the inflation rate.

In other words, the inflation rate has been higher than the rise in the foreign exchange market. As a result, the government further needs to boost the official exchange rate to offset growth in inflation rate. A single-digit inflation rate has been recorded over the past months, which has raised hopes for achieving a unified forex rate.

Besides, foreign exchange earnings must go up to enable the CBI to meet the needs of the forex market.

Unless responsible bodies study such realities in the market, they will fail to unify foreign exchange rates. Even if a unified system is realized, it may not remain in place without taking such realities into consideration.

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forex

IranDaily

 

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Loving it !!!

pp

[screwball]

NB ASA, Norway's largest bank, is set to start cooperating with Iran, said Norway's Foreign Minister Borge Brende, in a meeting with Ali Tayyebnia, the economy minister, on the sidelines of IMF annual meeting in Washington.

He added that the Norwegian government will encourage banks and financial institutions to start working with Iran, the ministry ofeconomy news service reported on Sunday.

He also added that Norway has opened a one- billion-dollar credit line for trade with Iran, $400 million of which has been used for exporting high- tech products. The credit line was granted to lran, earlier in August during Brende's visitto Tehran. Tayyebnia also called for measures to help ease two-way trade.

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News ID: 3791012 - Sun 9 October 2016 - 10:48

Economy

TEHRAN, Oct. 09 (MNA) – Iran’s Economy Minister Tayebnia met with Turkish, Italian and Indian counterparts on the sidelines of World Bank-IMF Annual Meetings 2016 in Washington DC.

The 2016 Annual Meetings of the Boards of Governors of the IMF and the World Bank Group was held in Washington DC., during the week of October 3-9 and, on the sidelines of the event, Iran’s Tayebnia held separate meetings with economy ministers of a number of countries investigating banking and customs challenges faced by Iran.

Speaking at a meeting with Mehmet Şimşek, Turkey's Deputy Prime Minister for Economic Affairs, the Iranian economy minister pointed to the recent developments and ending of sanctions calling for expediting expansion of bilateral economic ties.

Tayebnia further emphasized the need to boost banking relations between Tehran and Ankara adding “Iran’s banking system is ready to elevate broker relations with Turkish banks and we hope newly-reached agreements would facilitate the cooperation process.”

Tayebnia went on to point to previous suitable bilateral cooperation in the field of cross-border trade between the two sides voicing Iran’s readiness to enhance trade ties with Turkey on road to creating a common customs gate in order to provide a fundamental change in the bilateral trade.

He criticized the long lines of trucks at joint borders of Iran and Turkey for customs affairs noting that Iran has previously shown in practice its preparedness to completely eliminate existing problems.

Turkish Finance Minister Mehmet Şimşek, for his part, referred to good and developing cultural and political relations between the two parties appreciating the positive look held by the Iranian government towards expansion of bilateral ties though the current trade turnover between Tehran and Ankara is far from satisfactory.

He welcomed the initiative to develop customs and trade cooperation expressing Turkey’s readiness to taking effective steps in this regard.

At the end of his remarks, Şimşek voiced Ankara’s readiness to share fruitful experiences in attracting private sector investment in projects and stressed that grounds have been provided for a number of major Turkish banks to develop their cooperation with Iranian banks.

Pier Carlo Padoan, Minister of Economy and Finance of Italy, also at a meeting with Iran’s Tayebnia expressed his willingness to make a visit to Tehran in near future in order to finalize monetary and banking agreements.

“Italy believes in meeting obligations and enhancing ties with Iran,” noted Padoan underscoring that no effort will be spared in this regard.

The official said Italian firms and banks are determined to reinvigorate bilateral relations.

Iran’s economy minister, for his part, criticized the slow fulfillment of obligations on the part of the West calling for expansion of ties between world and Iranian banks.

He commented that bolstering of relations with Iran would benefit all countries; “security and stability could never be boosted in the absence of Iran.”

“In the wake of the post-JCPOA era, collective will need to be directed to implementation of agreements,” he continued.

He later stressed that Iran considers foreign proposals in view of current conditions with an emphasis on science and technology transfer; “Italians are eager to collaborate with Iran while they need to take more serious measures to remove persisting barriers.”

In yet another meeting with his Indian counterpart Arun Jaitley, Iran’s Ali Tayebnia emphasized the need for continuous transfer of the funds from the sale of oil to the South Asian country.

The official deemed launching of broker relations as Iran’s top priority; “despite constructive talks, no resolution has been achieved to resume these relations.”

Also at the meeting, the Indian finance minister highlighted that India is still committed to the oil fund transfer plan.

 

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