Iran’s economic stagnation and widening inequality are top concerns for Iranian voters. It is therefore no surprise that during the three televised debates, candidates ganged up on Abdolnasser Hemmati, until recently Iran’s central bank governor.
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All tagged foreign exchange
Iran’s economic stagnation and widening inequality are top concerns for Iranian voters. It is therefore no surprise that during the three televised debates, candidates ganged up on Abdolnasser Hemmati, until recently Iran’s central bank governor.
◢ Over the last 18 months, the Iranian rial has lost nearly 70 percent of its value, hammered by the Trump administration’s decision to reimpose secondary sanctions on Iran in violation of the JCPOA. But new interventions by the Central Bank of Iran appear to have helped stabilize the currency, leading some commentators to proclaim that the rial is no longer vulnerable to Trump’s maximum pressure campaign.
◢ Despite mounting evidence that the Iranian government’s policy of allocating subsidized foreign currency for the importation of essential goods has failed, the Rouhani administration has signaled that it plans to maintain the policy for at least another year. But lawmakers and Rouhani’s own cabinet ministers may force the administration to change course.
◢ An examination of the nature of Europe-Iran trade and the impact of this trade on Iran’s currency markets, suggests that the SPV could have a significant and stabilizing impact on Iran’s economy by helping to fight runaway inflation, the foremost economic challenge facing Iran’s leadership—even if the mechanism is initially limited to humanitarian trade.
◢ Forced to respond by Iran’s recent currency crisis, the Central Bank of Iran is approaching regulatory reform in the financial sector with new energy. A critical deadline to meet standards set by the Financial Action Task Force is forthcoming in June. Iran needs to demonstrate progress in tackling financial crime estimated to include at least USD 27 billion in transactions annually.