TEHRAN (Iran News)  Iran’s economy minister says the US government’s trade war against some other countries is indicative of the failure of Washington’s sanctions policy, particularly its so-called maximum pressure campaign against Tehran.

Abdolnasser Hemmati wrote on his X account on Sunday that the share of the US dollar in global reserves dropped to 58% from 65% in 2016, pointing out that even US President Donald Trump has acknowledged this decline and attributed it to the US’s wrong policy of sanctioning other countries.

“The US government’s focus on trade tariffs is another manifestation of the failure of the sanctions policy and the futility of repeating the maximum pressure campaign against Iran,” he said.

The US, under Trump’s first administration, imposed what it called the “maximum pressure” policy against the Islamic Republic in 2018 after pulling out of the Iran nuclear deal. The policy included harsh sanctions targeting Iran’s economy, particularly its oil sector.

Hemmati further said that the lifting of Iran’s oil sanctions is now more economically significant than ever given Canada’s threats to stop selling oil to the US due to a 25% tariff imposed on Canadian goods.

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TEHRAN (Iran News) TEHRAN – Minister of Economic Affairs and Finance, Abdolnasser Hemmati, highlighted the detrimental effects of currency suppression on the competitive capabilities of knowledge-based companies in the country. Speaking on December 17, 2023, during a press conference held after the signing ceremony of a memorandum of understanding between the Ministry of Economic Affairs and the Vice Presidency for Science, Technology, and Knowledge-Based Economy, Hemmati emphasized the crucial need to support these innovative enterprises.

According to Hemmati, the primary objective of the memorandum is to bolster and enhance the capabilities of knowledge-based companies so that they can successfully navigate marketing and selling their products in global markets, potentially even engaging in cross-border production.

“This is a significant opportunity amid the current sanctions,” he stated. “By enhancing the export of these products, we can import the necessary goods and components through barter, benefiting our economic landscape.”

Hemmati noted that there has been considerable effort from the Vice Presidency in recent months to facilitate this initiative, expressing optimism about the potential for increasing the exports of domestic knowledge-based products. He stated that this agreement focuses on the micro-scale products of these companies and has the potential to expand to neighboring markets as well.

With neighboring countries boasting imports exceeding $1 trillion, while Iran’s exports to these nations hover around only $27 billion, Hemmati underscored the vast potential for Iranian knowledge-based companies to significantly increase their export levels beyond current figures.

During a visit to the “Iran Made” exhibition, Hemmati observed a high potential for export within the country. He expressed concern regarding one of the significant issues facing companies at the exhibition, namely, the importation of similar foreign products by certain state entities, which undermines the products produced by local firms. He assured that efforts would be made to prevent such occurrences.

A key factor contributing to the challenges faced by local companies stems from currency suppression policies that make imported similar products cheaper, thereby eroding the competitive ability of local firms. Hemmati expressed optimism that recent government decisions regarding a more flexible currency exchange system would mitigate this issue.

“We hope to see a halt in the import of goods that are already being produced by knowledge-based companies in Iran,” he said, emphasizing that the government is committed to supporting local innovation and production.

Hemmati mentioned that the Iranian Foreign Investment Holding Company (IFIC) is actively assisting knowledge-based enterprises, and the ministry is committed to facilitating their operations effectively. He acknowledged queries regarding foreign investments made by IFIC, explaining that these investments are primarily state-to-state collaborations, such as the Iran and Egypt Development Bank, in which Iran holds a 40% stake.

Addressing speculation regarding the suspension of the Privatisation Organisation’s meetings, Hemmati clarified that only the high council sessions had been temporarily paused; regular meetings would be reinstated in the coming week.

Furthermore, he provided updates on the ongoing formulation of the Production Finance Law, stating that related regulations, including its validation guidelines, are nearing completion. Some components of this legislation have already been implemented, such as the financing of production chains backed by available credit documents, which are currently operational.

Hemmati confirmed media reports about a temporary halt in the issuance of business licenses, attributing this situation to concerns raised by certain organizations regarding ambiguities in the process. Nonetheless, he assured that the procedures for reviewing and issuing business licenses would resume shortly as the necessary directives were issued three weeks ago.

In summary, the Minister’s remarks underscore the Iranian government’s recognition of the vital role of knowledge-based companies in driving economic progress, especially under the strain of sanctions and currency stability challenges. As the government aims to mitigate the negative impacts of currency suppression, there is a hopeful outlook for the growth and expansion of local innovations in international markets.

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TEHRAN (Iran News) Hemmati, who has traveled to Riyadh to attend the 28th World Investment Summit, met and talked with Suleiman Al-Jasser, the head of the Islamic Development Bank, on Monday.

He stated that we expect the Islamic Development Bank to play a more effective role in financing Iran’s projects.

“The Islamic Republic of Iran is determined to fulfill its obligations towards the Islamic Development Bank,” Hemmati added.

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The chief banker cited figures released by the CBI’s Economic Accounts Department showing that Iran’s gross domestic product (GDP) grew by 3.9 percent with oil and by 2.9 percent without oil in the quarter to December 20.

“Thus, one can definitely announce the transition of the Iranian economy from the difficult period of sanctions and the recession associated with it to a period of renewed economic growth,” said Hemmati.

Iran has been hit hard by a series of unprecedented US sanctions since the middle of 2018 when a former government in Washington decided to pull out of an international agreement on Iran’s nuclear program.

Sanctions have largely targeted Iran’s exports of crude as its main source of earning hard currency. However, the bans have triggered a sweeping reform program in the Iranian economy as the government continues to diversify its revenues away from oil by encouraging increased activity in the manufacturing and agriculture sectors.

Hemmati hailed the fact that Iran had recorded two-quarters of economic growth at a time many countries are grappling with a deep recession.

He said the latest CBI data on GDP growth and the performance of various sectors of the economy during the quarter to late December will be published next week.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Iraq has agreed to release Iranian funds blocked in the Arab country because of American sanctions for Iran’s purchase of staples and basic goods, the Central Bank of Iran (CBI) governor Abdolnasser Hemmati said after meetings with senior Iraqi officials in Baghdad on Monday.

Hemmati said in a post on his Instagram page that some “good agreements” had been reached on the issue in a trilateral meeting involving him and his Iraqi counterpart as well as the CEO of Trade Bank of Iraq (TBI) where the Iranian funds are blocked.

Iran has billions of dollars in a TBI account which processes Iraq’s payments for imports of natural gas and electricity from Iran.

However, the funds have been blocked because of U.S. sanctions on Iran which restricts the use of dollar for transactions involving Tehran.

The assets held in Iraq belong to the Central Bank of Iran, which is the main supplier of the basic demands in various sectors such as industry, agriculture and healthcare, he explained, saying Tehran would begin to withdraw money from those funds according to its needs.

The commodities that are categorized as basic needs are exempted from the cruel and unilateral sanctions imposed by the U.S., the Iranian official noted.

Hemmati said Iraqi Prime Minister Mustafa Al-Kadhimi had welcomed the agreement to use the funds to reimburse Iran’s basic goods imports.

“In the meeting with the Iraqi premier … he issued the required orders to the Iraqi central bank and the TBI to speed up the implementation of the agreement,” said Hemmati, adding that Kadhimi had vowed to personally follow up the case on a weekly basis.

Hemmati made a first visit to Baghdad in June to pursue the case of blocked funds in Iraq. The CBI governor had expressed optimistic remarks about the release of funds in Iraq on that occasion but a final decision on the issue has been waiting reportedly because of growing American pressure on Baghdad.

A high-ranking trade and banking delegation accompanied Hemmati in his Monday trip to Iraq. The top banker said the visit would bolster the already growing trade relations between the two countries.

Iraq is only second to China in purchase of goods and services from Iran with recent figures showing Iranian exports to the Arab country reached $565 million in value terms in the Persian calendar month to September 21.

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In a telephone conversation with the governor of the Central Bank of Iran Abdolnasser Hemmati on Friday, Rouhani was briefed on the latest measures and developments in the process of providing foreign currency financing for basic and necessary commodities in Iran.

The president was also informed about the details of the CBI’s efforts to repatriate foreign currency earned from exports, the CBI’s use of various resources at its disposal, and its strategies to supply the basic and necessary products that the country needs.

Rouhani commended the CBI for satisfying the necessary domestic demands under the difficult international conditions according to the plans formulated by the administration, the government’s official website reported.

For his part, Hemmati expounded on the process of the CBI’s activities for open market operation in money and capital markets.

The latest report by the Central Bank of Iran shows that the monthly fluctuation in the producer price index, which is a leading indicator, has, fortunately, stood at minus 0.8 in the month of Farvardin (March 20 – April 19), Hemmati added.

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According To Iran News, The Central Bank of Iran (CBI) approved emergency funding worth nearly $5 billion to offer cheap loans to businesses hit by the new coronavirus pandemic.

CBI governor Abdolnasser Hemmati said on Thursday that major lenders in the country would start giving the loans “in the earliest time possible”.

The loans will be offered at a heap rate of 12 percent, said Hemmati, with a repayment period of two years, Press TV reported.

He said the decision came after a high-level government meeting earlier in the day on the economic measures needed to respond to the virus pandemic in Iran.

The announcement came after Iranian president Hassan Rouhani said earlier on Thursday that cheap loans will be available to businesses and manufacturing units soon to help them cope with the impacts of the pandemic.

Rouhani said at a cabinet meeting that the government would ask for nearly $1 billion worth of support package from Iran’s severing wealth fund.

Iranian Vice President Eshaq Jahangiri, who chairs the special economic committee of the government on coronavirus, said that the loans could reach a total of 1,000 trillion rials (6.25 billion).

Jahangiri said part of the funds would go to benefits to people who have lost their jobs and others could cover urgent necessities in the health sector.

The new funds come on top of previous government measures to help families affected by the outbreak of the new coronavirus and finances provided to the health ministry for imports of vital medical equipment and drugs needed to fight the virus.

Nearly 30,000 Iranians have been tested positive for the new coronavirus, known as COVID-19, since the infection was spotted in the country last month.

More than 10,000 have recovered from the illness while more than 2,200 patients have died, based on latest figures provided by the Iranian health authorities as of Thursday.

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TEHRAN (Iran News) – Chief banker of Central Bank of Iran, said Tehran has devised alternative ways to bypass US embargoes against its foreign oil sale and to retrieve revenues.

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IRAN NEWS Economic Desk

He then pointed to some efforts for banking without interest (usury) which is a pre-requisite for Islamic banking, admitting the measures have not been enough in the past years and there are hurdles especially in allocating the sources.

Hemmati also gave an upbeat report about recovery of Iran’s economy, saying that national economy currently enjoys stability.

He said that the restoration of stability in the Iranian economy is fundamentally due to stability in the forex market coupled with a gradual fall in foreign exchange rates over the past months.

He said that the gradual reduction of monthly inflation since last March to levels under 1% this month is indicative of the reduction of the impacts of fluctuations of foreign exchange rates.

Besides the efforts to bring liquidity under control, the CBI is now most concerned about ways to provide financial resources for the production sector, Hemmati said.

The partial improvement of some economic indicators compared to figures from the last year is indicative of U.S. failure to achieve its goals, the CBI governor said, however, noting that removal of Iran’s economic problems, particularly reforming the national budgeting, requires sound measures and policies.

Hemmati also pointed to the curb of inflation adding that inflation rate for some groups of commodities has fallen in recent months and it will help the economic condition to become stable.

He also reiterated that some of problems in the banks are because of some corruption which had happened in the past, adding that since he took office as the governor of the central bank, he has called for accurate inspection and control of banking operations.

He also said that people should not ignore the good services of the banks to the society and national economy, adding that currently 90 percent of financing in the country is carried out by banks and they play important role in the economic development in the country.

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In the meeting, Hemmati stated that CBI is planning to control the foreign exchange market in order to maintain market equilibrium in the country.

He further expressed hope that the continuation of the relative calmness in the markets would lead to a boom in domestic production.

“Fortunately, the foreign exchange market is stable, and the reinjection of exports revenues into NIMA are getting better which is a sign that the country’s businessmen and traders are welcoming CBI’s recent foreign exchange policies,” he said.

Elsewhere in his remarks, Hemmati underlined some of CBI plans for directing liquidity to small and medium-sized enterprises, adding that the central bank is actively pursuing support for small and medium-sized manufacturing units.

“In this regard, and in order to prevent recession, new programs are being developed in collaboration with the country’s monetary experts and will be implemented in the form of a productive financing plan,” he noted.

Like the other economic bodies of the country, CBI has defined supporting production as its major plan in the current Iranian calendar year, which is named the Year of Pickup in Production, and in this regard Hemmati has several times stressed that supporting production units to flourish production is the priority of the country’s banking system in current year.

In early May, the official outlined CBI plans for neutralizing or relieving the impact of U.S. sanctions on the country’s economy and mentioned providing liquidity and working capital to maintain and boost domestic production as one of those plans.

To find the best ways for supporting production, CBI is regularly holding meetings with the representatives of private sector and also with the economists.

CBI’s plans take two major approaches, first is that they will lead to secure finance for production activities and provide the working capital needed for such activities; and the second one is that they will not be resulted in any deviation in the banking resources and also in higher inflation.

In this regard, the central bank’s committees of liquidity and credit have investigated several plans, that one of them is “Productive Finance Plan”, which will be implemented after being discussed with monetary and banking experts.

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