Seif: US Decision Not to Impact Economy

EghtesadOnline: The US decision regarding Iran’s nuclear deal, whatever that may be, will not cause any disruption to the country’s economy, the governor of the Central Bank of Iran said.

News ID: ۷۸۲۵۳۹

12 May 2018

Valiollah Seif also said on Tuesday that at the core of recent decisions taken by the government regarding the foreign exchange market has been the immunization of the economy from “ enemies’ propaganda”, particularly that of the US.

“Recent forex measures have caused the country’s forex reserves to be put under proper control so that hard currency can be allocated to meet prioritized need,” Seif was quoted as saying by IBENA.

US President Donald Trump announced on Monday that he will reveal whether he intends to breach the nuclear agreement with Iran on Tuesday. In a mid-afternoon tweet, Trump treated his upcoming diplomatic decision as though it were a reality show finale, according to Financial Tribune.

However, Trump did not need to make this decision on Tuesday. The deadline for action won’t come until May 12, when the president will need to renew a waiver on America’s nuclear sanctions against Iran—or else, violate the terms of the agreement that limited Iran’s nuclear program in exchange for sanctions relief.

Six nations signed the deal–titled the Joint Comprehensive Plan of Action–with Iran, namely the US, the UK, France, Germany, China and Russia. It was approved by the UN Security Council.

The European allies of the US have been scrambling to convince Trump to preserve the deal. Britain’s Foreign Secretary Boris Johnson lobbied for the deal’s survival in Washington on Monday. Johnson laid out his case for the agreement in a New York Times op-ed—and then took his case directly to the president (by appearing on the TV show Fox & Friends).

Meanwhile, Germany and France announced their intention to honor the agreement, irrespective of Trump’s decision.

CBI Has No Worries

Seif noted that Iran’s economy will strongly move on, as “there is no room for pause or worry”.

Asked about the government’s plans in case of a US pullout, the CBI chief said, “The country will maintain its economic structure without any attention to enemies’ decisions and actions. Whatever the US decision, there will be no need to take extra actions than what we have taken so far.”

The government decided to unify the dollar’s exchange rate at 42,000 rials in the wake of a sharp slide in the value of rial in the early days of the current fiscal year that began on March 21.

According to the measures, the US dollar for all purposes, including imports, travel, overseas students and research projects, will be offered by the government at the exchange rate of 42,000 rials.

The announcement was later followed by other measures approved by the Cabinet and subsequently notified by CBI.

It was also decided that travel currency would be allocated only up to €1,000 or its equivalent in other currency once a year and €500 if the trip is made to a neighboring or allied country.

The central bank has also launched the Integrated Foreign Currency System (locally known as Nima) to track all the forex transactions, which involves banks, exchange houses, importers and exporters.

According to pundits, without the cooperation of America’s EU allies, Trump’s capacity to impose biting economic sanctions on Iran will be somewhat limited.

Tehran has far stronger trade ties with Europe than with the US, and so, has relatively little to lose from America pulling out of the nuclear agreement, so long as Britain, France, and the UK remain in it.