Iran: €5b Repatriated by Non-Oil Exporters

EghtesadOnline: Exporters of non-oil products have repatriated €5 billion of their export earnings to the economic cycle of the country since the beginning of the current fiscal year (started March 21), a Central Bank of Iran’s official said.

News ID: ۷۴۷۷۴۵

03 July 2019

“Of this amount, €1 billion pertained to products exported by small- and medium-sized companies,” Samad Karimi, the head of CBI's Exports Department, was also quoted as saying by IRIB News.

Speaking on the sidelines of a meeting with private sector representatives, the official noted that since the launch of the Integrated Forex Deals System (locally known by its Persian acronym Nima) in the last fiscal year (March 2018-19), a total of €18 billion worth of non-oil export earnings have been repatriated to the country.

According to media reports, the repatriated amount accounts for less than half of the total value of non-oil export last year, Financial Tribune reported.

Nima is a platform where exporters sell their currency earnings to companies importing non-essential goods. It logs data bout repatriated and purchased forex for import and export.

Karimi pointed to exporters’ complaints about the currency repatriation mechanism, saying the CBI is serious about implementing its foreign exchange policies.

Private sector representatives reflected on the recent bylaw unveiled by CBI. The new rule for currency repatriation, touted to be better than all other previous rules, has apparently failed to appease exporters.

In response to private sector calls for eliminating the limits set for currency repatriation, Karimi reiterated that CBI won’t back down on any of the stipulated conditions contained in the bylaw.

After tweaking previous repatriation rules, CBI announced new rules in May to help facilitate the repatriation of export earnings.

The rules oblige petrochemical exporters to return at least 60% of their revenues through Nima, whereas non-petrochemical exporters need to offer 50% of their currency.

Exporters are required to sell a maximum 20% of their income to moneychangers. The balance can be used for importing goods either by exporting firms or third parties.

“As CBI has the mission to meet the foreign currency needs of importers, any changes on stipulated limits in the bylaw would be out of question,” Karimi said.

Repatriation in Rial Opposed

The top banking official also addressed another issue of concerns posed by exporters who urged CBI to allow exporters to neighboring Iraq and Afghanistan to return their earnings in rial.

Rejecting the proposal, Karimi noted that CBI has examined assorted approaches toward currency repatriation and firmly opposes any request to undertake export earnings repatriation in national currency.

He pointed to the scale of trade between Iran and its neighboring countries, arguing that a huge volume of Iran’s trade is conducted with its neighbors and CBI will seriously take note of the export earnings from those countries.

According to the latest report released by the Islamic Republic of Iran Customs Administration, Iraq was Iran's second biggest export destination after China in the last fiscal year (March 2018-19).

The neighboring Arab state imported 18.3 million tons of non-oil goods from Iran during the 11 months to Feb. 19.

Iran’s exports to Iraq mainly included liquefied natural gas, mineral oils, detergents and tomatoes.

In addition, Iranian merchants traded 2.79 million tons of non-oil commodities worth $1.43 billion with Afghanistan during the first half of last year.

Afghanistan was Iran’s fourth major export destination during the period.