TEHRAN (Iran News) – Forex Price Continuing Its Downward Trend. The Governor of Central Bank of Iran Akbar Komijani says the country in recent days has seen the decline in the forex rate in the market as a U.S dollar is being currently traded at around 260,000 rials while it had hit 280,000 rials.
Speaking at the 31tht Annual Seminar on Islamic Banking which kicked off in-presence and virtually yesterday, Komijani said that since last year some actions have been taken to provide required forex for purchase of COVID-19 vaccines and this trend has been accelerated in recent months and currently there is no problem for providing the required forex for the vaccines.
He then pointed to the Supreme Leader’s remarks in 2019 when he, in a statement, announced the Second Step of the Revolution and said the Leader in his statement pointed to some essential and important points to propel the country towards a big jihad for making Islamic Iran.
He said reliance on oil revenues, state-run economy and ignoring the domestic capacity with reliance on the overseas helps as well as unbalanced budgets have been of the major points that the Leader in his statement has mentioned as failures which should be amended.
Komijani then pointed to the advantages of the Islamic Banking which will lead to the pick-up in the economy and production as well as the joint cooperation. He then elaborated some actions of the Central Bank like buying the Islamic financial bonds which is used to meet the budget deficit of the government.
Touching upon the macro-economic developments in the country, he said that in the past three months the country has been under the cruelest of the U.S. and Europe, including banking sanctions, sanctions on the CBI, and foreign trade which decreased the oil revenues considerably.
Komijani went on to say that in the past years Majlis and government have taken some measures to confront sanctions, adding but the pandemic pushed the economic growth towards negativity but last year the country had some acceptable achievements in the economy and its economic growth reached 2.5 percent and the figure was 3.5 percent with inclusion of oil revenues.
He added that liquidity rose by 39.5 percent in the last fiscal year while monetary base grew by 42 percent in the same period.
Komeijani also emphasized the significant role of the banking system in funding the government and realizing the budget bill income expectations, and said: “Last year, the Central Bank sold more than 1.26 quadrillion rials (about $30 billion) of Islamic bonds, of which about 51 percent were bought by banks and the rest by individuals and legal entities in the financial market; this provided a great opportunity to offset the budget deficit.”
“If this tool was not used, the budget deficit would have been met by the banks and that would have caused the monetary base to grow,” he said.
He expressed hope that the country would see economic growth this year and the World Bank statistics show that the world economic growth has minus 3.6 percent last year and major industrial countries have witnessed negative economic growth because of the pandemic.
Komijani noted that the CBI by using the new policy in the national banking system and national economy works to manage the liquidity and banking interest rate and improvement of balances of the banks is on the agenda of the CBI.
He said in recent days rial has gained against foreign currencies as a U.S. dollar which was trade for 280,000 rials last week is not traded for 260,000 tomans and it is expected the downward trend to continue in the upcoming days.
Further in the seminar, Khandouzi also delivered a speech in which he emphasized the need for implementing justice in the banking system.
The official also addressed the important issue of directing liquidity towards production and said: “Today, about 97 percent of money and liquidity is created by banks. So, the question that arises is whether this liquidity is directed toward the production sector and entrepreneurs through the credits provided by the banks or enters the non-productive sector? Do banks use their money-making power to build or to destroy the country’s economy?”
He further stressed the need for strict monitoring of the country’s banking system and said: “In the country’s banking system, the policy maker and the supervisor should not be the same. The policymaker must implement his policies and the supervisor should oversee these policies and their implementation.”
“Today, new technologies have made it possible for both bank managers and supervisors to monitor various banking processes. Technologies such as digital currency allow the central bank to prevent money laundering and tax evasion by controlling the flow of money in the country,” Khandouzi explained.
The two day seminar will be concluded today.