Iran CB Governor: $47b in Non-Oil Currency Earnings Expected for 2018-19

EghtesadOnline: Governor of the Central Bank of Iran said on Saturday that with tweaks made to export revenue repatriation rules, he expects $47 billion in non-oil receipts by the end of the current fiscal next March.

News ID: ۷۴۶۲۳۴

18 November 2018

In an instagram post, Abdolnasser Hemmati said in devising the new currency repatriation rules, the views of private sector has been sought but did not provide details.

Currently exporters are required to bring their export earnings into the country within three months.  But businesspeople complain that with double whammy of US sanctions which make banking transactions difficult (and may be impossible) and economic recession, it is virtually impossible to meet the deadline. Furthermore, they say, part of export earnings from neighboring countries are in rial not foreign currency.

Hemmati said that currency repatriation can take place through different methods such as the secondary market Nima system, cash transfers through the hawalah or the bureaux exchanges or use the hard currency for imports, Financial Tribune reported.

The secondary market was created by the CBI in August after it said a class of goods would not be eligible for subsidized currency and rates of the foreign currency they need should be negotiated between them and exporters who sell their earnings inside the country.

Hemmati cautioned that anything other than the repatriation methods would amount to capital flight. While the CBI's new directive is in the works, earlier rumors suggested that small scale exporters would be exempt from the rule.

Volatility in currency and gold markets further intensified after US President Donald Trump pulled out from a multilateral nuclear deal Iran signed with world powers in 2015.

Easing Rules

On August 6 the CBI eased foreign exchange rules and allowed money exchangers to resume work at open market rates as part of the latest rescue package devised to calm the chaotic market.

In the first seven months of the current fiscal (March 21-Oct. 22) non-oil exports, excluding crude oil, mazut, kerosene and suitcase trade, hit 67.36 million tons worth $27.22 billion, registering more than 13% growth in value year-on-year, the Islamic Republic of Iran Customs Administration reported.

Of the top 100 export destinations, 20 countries proved to be the main contributors to Iran's export growth. Iraq overtook China as the main non-oil export market during the period. Iran’s exports to Iraq surged by 55%, accounting for 21% of the total outbound cargo.