Iran’s central bank chief claims he has country’s forex market fully under control

Iran’s central bank chief claims he has country’s forex market fully under control
Hemmati says he is focused on "implementing the policies outlined for the ‘resistance economy’".
By bne IntelliNews January 24, 2019

Governor of the Central Bank of Iran (CBI) Abdolnasser Hemmati claims to have the country’s foreign exchange market fully under control and insists that the Islamic Republic has enough hard currency supplies for the “next two years”, Mehr News Agency reported on January 24.

The report came a day after Iranian state TV carried an interview in which the central bank chief, Abdolnaser Hemmati, said Iran has adequate currency supplies to cover trade, and that the Iranian rial (IRR) has stabilised after “a heavy attack” from the US-led economic sanctions imposed on the Islamic Republic since last year.

“We are more focused on implementing the policies outlined for the ‘resistance economy’ including reducing our reliance on oil revenues and increasing our dependence on domestic potentials and non-oil exports,” Hemmati was quoted as saying by Mehr.

It also cited him as saying that inflation was “now under our control” despite the ongoing US pressure on the system. Annual inflation in Iran stands at just slightly short of 40% but the monthly rises appear to be slowing.

Iranians must change their spending habits and “take seriously” persistent efforts by the US to destabilise the economy, Hemmati also told state television. The country faced having to confront “very high” levels of corruption that are exacerbated by exploitative currency trading practices, he added in the interview.

The IRR is weaker by around 60% against the USD compared to February of last year. For the past month, the dollar has been trading at between IRR110,000-120,000 on the open market. At its weakest point last year it was plunging towards the IRR200,000 mark.

Hemmati, appointed as the currency collapse grew critical last year, has systematically removed many policies of his predecessor. He has brought much of the free currency exchange market under his personal supervision in a bid to calm rampant inflation and wild speculation. Officials have intimidated currency profiteers into staying out of the market by pointing to special courts they can be brought before. The courts were set up to deal with opportunists who criminally exploit market turmoil brought about by the sanctions.

The Trump administration has set out to throttle Iran’s economy as it attempts to force changes to the country’s regional foreign policy and activities that would curb its influence in the Middle East.

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