TEHRAN (Iran News) According to ILNA, citing the government’s information portal, Abdolnaser Hemmati explained the performance of the commercial foreign exchange market after the unification of exchange rates and detailed the framework of the country’s new foreign exchange policy as well as the market’s two-week performance.

Hemmati emphasized that under Article 20 of the Law on Permanent Provisions of Development Programs, Article 44 of the Central Bank Law, Article 11 of the Seventh Five-Year Development Plan, and Clause 19 of the General Policies of the Resistance Economy, the Central Bank’s foreign exchange strategy is based on a “managed floating exchange rate with the application of necessary controls.”

According to Hemmati, the Central Bank’s strategy is to manage the foreign exchange market in line with fundamental economic variables, ensuring minimal volatility around the trend, while taking into account foreign exchange reserves, the competitiveness of domestic enterprises, and the prevention of corruption-prone environments in foreign exchange and trade.

He added that given ongoing sanctions, the intensification of economic warfare, and the inadequacy of conventional foreign exchange intervention methods to maintain exchange rate stability—along with disruptions in foreign exchange flows—the implementation of certain foreign exchange controls has become necessary.

Hemmati noted that by converging multiple exchange rates, an integrated exchange rate system will be formed. Requirements such as order registration, currency allocation, registration of the source of foreign currency, systematic operation of exchange offices, and capital account controls are among the key examples of these foreign exchange controls.

Referring to developments in the commercial foreign exchange market over the past two weeks, Hemmati said that despite an almost threefold increase in outstanding currency allocations—from $1.3 billion to $3.7 billion—the market has moved from a daily $500 million excess demand for foreign currency to a $70 million excess supply. He attributed this shift to the elimination of import-related rent-seeking.

He added that while part of the decline in demand may be due to the need for rial liquidity, a 50 percent increase in trading volume—equivalent to a $70 million rise in daily transactions from $80 million to $150 million—indicates that the commercial market has become deeper and more central to the integrated management of the foreign exchange market.

The Central Bank governor said that during the two-week period, various currencies equivalent to $2.75 billion were traded in the commercial foreign exchange market, all of which were supplied by non-oil exporters.

He noted that the average exchange rate in this market ranged between 120,000 and 130,000 rials per dollar.

Hemmati stressed that the Central Bank’s focus is on the repatriation of export revenues and on creating incentives and removing obstacles in the process of returning foreign currency. He said this approach has led to a meaningful increase in the return of export proceeds to the country’s commercial cycle in the short term and will contribute to higher exports in the long term.

In closing, the Central Bank governor announced that to date, more than 27 million households have used the electronic coupon subsidy program, amounting to 785 trillion rials, to purchase essential goods.

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TEHRAN (Iran News) Speaking to reporters on the sidelines of a ceremony marking the issuance of Murabaha sukuk by Mobarakeh Steel Company, Farzin said negotiations are scheduled with Omani central bank officials to introduce these Islamic financial instruments into their market.

Farzin emphasized that the Central Bank is focused on diversifying financial instruments to support both foreign currency and rial-based financing needs. He noted that while the CBI does not directly engage in currency operations, such activities have been delegated to Iran’s Currency and Gold Exchange Center.

“We have multiple projects requiring foreign currency funding, and our aim is to use diverse financial tools for this,” Farzin stated. “This includes launching pre-sale foreign exchange contracts and sukuk bonds.”

He explained that the sukuk initiative is part of a broader push to establish a forward currency market in Iran — a common practice globally. Though technical and infrastructure hurdles have delayed the rollout, Farzin said the plans are firmly underway.

Among the alternative methods being implemented is the pre-sale of foreign exchange, which allows for upfront financing and has already begun through the issuance of bonds for select projects. The aim is to raise up to $2 billion in foreign exchange sukuk this year, building on smaller efforts from the previous year, such as funding the Bidboland Refinery project.

Iran is also looking to collaborate with the National Development Fund and several domestic banks to facilitate bond issuance. Farzin believes these bonds could be attractive not only to the public but also to businesses, exporters, and importers.

Regarding Iran’s efforts to market these financial products abroad, Farzin revealed that talks have already commenced with Russian financial institutions to introduce Iranian sukuk in their markets. However, the first available bonds, such as those from Mobarakeh Steel, are currently accessible only within Iran.

Farzin added that nearly €1.86 billion in projects are slated to be financed through foreign exchange bonds.

He dismissed concerns that sanctions might interfere with profit payments or principal repayments to investors, stating, “Sanctions have not impacted our ability to repay. All bondholders have received payments on time, and we’ve sold bonds with a 6% return in just 48 hours.”

President Pezeshkian is expected to visit Oman next week, with Farzin scheduled to arrive a day earlier for preliminary discussions with Omani financial authorities. The talks will focus on finalizing the framework for offering Iranian sukuk in Omani markets.

Farzin also addressed the controversial case of Babak Zanjani, a businessman convicted of massive embezzlement. He confirmed that nickel reserves belonging to Zanjani are being held at the Central Bank’s vault, not at customs warehouses.

“These reserves were supposed to be sold by Mr. Zanjani to repay his debts to the Central Bank. We’re still waiting on that,” Farzin said, adding that the CBI has not assessed the true value of the nickel, nor verified its authenticity.

On Zanjani’s cryptocurrency assets, Farzin noted that any recovery or collection would depend on final rulings issued by the judiciary.

Farzin revealed plans to issue export credits for agricultural producers trading in the country’s “Commercial Forex Market.” This separate market aims to prevent agricultural exporters from competing with petrochemical firms, whose dominance often skews prices and access.

In response to questions on bank specialization, Farzin noted that charter reforms are underway as part of the Seventh Development Plan. Once implemented, banks will operate solely within their defined mandates — for example, marriage loans would only be processed by select specialized institutions.

Until then, all banks remain obligated to participate in mandatory lending programs such as marriage and childbirth support.

Mojtaba Zanganeh, Head of the National Development Fund, stated that the next planned bond issuance — in collaboration with Bank Tejarat — will raise up to $200 million for upstream oil sector projects.

He emphasized the urgency of investing in shared oil fields currently being tapped by neighboring countries, warning that delays would lead to the loss of national resources. “The upstream oil sector offers strong returns and can help stabilize broader energy imbalances, especially in natural gas,” Zanganeh said.

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IRAN NEWS ECONOMIC DESK

TEHRAN – The Governor of Iran Central Bank Mr. Abdolnasser Hemmati yesterday had a virtual meeting with Ghana’s Economy Minister and during the meeting they explored ways for boosting their banking cooperation.

In the meeting which was held upon the request of Ghanaian Economy Minister Ken Ofori-Atta, both sides exchanged views and experiences, and talked about some remained issues from the previous meeting  and about the current condition of G24 and its future as well as discussing ways for their expansion and coordination with IMF and World Bank.

By the way, both parties expressed views on forming a specialized group with participation of private sector and Mr. Hemmati welcomed the proposal for more bilateral cooperation and called for continuity of contacts between both states.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Governor of Iran Central Bank of Iran Abdolnaser Hemmati yesterday blamed the sanctions for recent devaluation of the national currency against the foreign currencies in the forex market.

On the sidelines of a ceremony for honoring those exporters who have repatriated their earned forex into the country, Hemmati said that in cooperation with the supervisory organs, $8b out of $27b resulted from the exports which had not been repatriated into the country has returned into the national economic cycle and expressed hope that soon the remaining $19b would return into the country which would help the national currency gains value.

He noted that the CBI has sent the list of exporters, who have not returned their forex into the country, to the Judiciary, expressing hope the Judiciary would help the bank in return of the forex.

On the frozen money of the country in foreign banks, Hemmati said that billions of dollars of the country have been blocked in foreign banks and they are not ready to unblock them due to their fear of the U.S. fines. He added that fortunately some part of them has been blocked and would be injected into the national economic cycle, expressing hope that by injection of the unblocked forex, the power of CBI for interfering in the market for supplying forex would increase.

He reiterated that the CBI accepts any foreign currencies from exporters and they cannot resort to such pretexts that their partners are only ready to pay their money in their national currencies.

Hemmati pointed to the efforts of enemies for closing the national economic gateways and exerting heavy sanctions, adding that fortunately the Islamic Republic of Iran in collaboration with exporters and economic activists has managed the problems and the country is experiencing the last days of pressures.

He noted that oil exports of the country have improved in recent months and he hopes the economic growth would bounce back and become positive.

Hemmati also pointed to the outbreak of Coronavirus and called it a disaster for global economy, adding that Iran also was affected by the virus. He said all programs of the country for getting out of recession or reducing inflation were going ahead well till April but since June, the economic growth has lost its progress.

He added that nobody can benefit from devaluation of national currency and rise in the price of dollar, adding that some people may benefit of it but the society would be the main loser and CBI and the government are not after raising the price of the dollar in order to compensate the budget deficit.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Majlis yesterday passed a bill allowing the government to slash four zeros from the rial, after a sharp fall in the value of the currency.

Under the approved bill, Iran’s national currency will be changed from the rial to the Toman, which is equal to 10,000 rials.

The bill needs to be approved by the Guardian Council before it takes effect.

Iran’s state TV said the Central Bank of Iran will have two years to “pave the ground to change the currency to Toman”.

Addressing to the open session of Majlis in defense of the bill, the governor of Central Bank Abdolnaser Hemmati said that because of the inflation in the past five decades, rial and dinar have lost their stamina and actually toman has replaced them in the society and people use toman in their daily trades and they even equals 50 tomans to 50,000 tomans.

On the cost of destroying old banknotes and printing new ones, he said there are some eight billions of banknotes circulating in the country and five billions of them are banknotes with value less than 2,000 tomans and by this approval and cutting four zeros, the bank can circulate one- and two-toman coins.

Hemmati reiterated that currently the bank destroys one billions of banknotes annually which its annual cost is around 400b tomans.

He reiterated that protecting the reputation of the national currency is very important, adding that currently the gap for changing rial with currencies like dollar and euro is very high. He admitted that the ration between national currency with dollar is 0.000006 which is a very weak one in the world.

Hemmati added that cutting the zeros will revive usage of coins in the country, adding that currently the per capita of banknote in the country is 102 and the figure for the coins is just 26 while the per capita of coins in other countries is three times more than Iran.

He once again reiterated that cutting zeros has no impact on inflation and they are other factors which are crucial in inflation.

Hemmati reiterated that replacing the current banknotes with the new ones will be gradual while both rial and toman will be valid during the transition period.  After that phase, all financial commitments based on the rial will be fulfilled in toman, he stressed.

The idea of fewer zeros has been floated for almost 16 years. The initiative to change the currency was first proposed by the government in August.

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The Supreme Council of Economic Coordination convened on Sat. in a session chaired by President Rouhani where members discussed and approved the authorities of the Central Bank of Iran for implementing the Banking System Reform Plan.

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