TEHRAN (Iran News) – The Governor of the Central Bank of Iran says foreign currency revenue of the bank has increased in recent months and improved its leverage to curb volatility in the forex market.
“The government’s currency income increased threefold in the first five months [March 21-Oct 22] of the current fiscal year compared to the same period last year,” Ali Salehabadi told state TV.
Pointing to pattern of forex repatriated by exporters in the period, he said currency deals between exporters and importers through the Nima platform reached $16.5 billion in seven months. This was almost double the amount on last year.
“This is while forex trade in the whole of last fiscal year [ended in March] was $16.7 billion. This shows that we have made progress in augmenting currency income.”
He reiterated that the CBI is managing the forex market but it does not sell forex and this is the exporters themselves who offers repatriated fore from exports in the market.
He noted that in case of emergency, the CBI may step into market but it does not intend to use its forex sources in the market.
Salehabad went on to say that the price of the forex depends on several economic factors and the CBI as a balancer can enter the forex market but the forex resulted from exports and its return to the market will boost economy.
He reiterated that protection of national currency value depends on inflation rate and other economic factors. He also blamed the lack of balance in banking resources as the other factors behind inflation.
He claimed the inflation rate dropped to 6.7 percent last month and the point-to-point inflation is decreasing.
Meanwhile data released by the Central Bank of Iran show the reserve requirement of banks increased more than twofold in three years.
The legal reserves rose from 154 trillion rials ($570 million) in fiscal 2017-18 to 354 trillion rials ($1.3 billion) by the end of the last fiscal year (March 21) up 129%.
Funds held by banks as reserve with the CBI stood at 194 trillion rials ($718m) in 2018-19 and 260 trillion rials ($962m) in 2019-20, respectively, showing annual growth of 26% and 33.7%.