Fresh Calls for Building Export-Based Economy

EghtesadOnline: Head of the Central Bank of Iran and the Minister of Industries this week underlined the need to promote non-oil exports.

News ID: ۷۸۷۶۹۵

29 January 2022

In their regular meeting, it was decided to “coordinate foreign trade and currency policies and improve forex income from exports,” the CBI website said.

The CBI Governor Ali Salehabadi said it is incumbent to build an export-based economy as in most other countries.

“Generating sustainable sources of forex income and promoting export is a progressive approach that has been adopted by most functioning economies,” Salehabadi was quoted as saying.

“In line with this vision, administrative bodies must stick to plans that underpin currency income.”

Struggling to find alternative source of income to substitute lost oil revenue due to the 2018 US economic blockade, governments in Tehran have focused on promoting non-oil exports.

The CBI said last month under eased rules enforced in recent months plus new incentives export activity and, by extension, currency revenue has increased.

Export companies sold $18.1 billion via the Nima market as of mid-November. The amount was $10.7 billion in the corresponding period last fiscal year.

Nima is an online platform affiliated to the CBI where exporters sell their overseas currency income and companies buy for import.

Salehabadi expressed the hope that the country’s foreign exchange income would increase in the next fiscal year (starts in March), saying measures are needed to avoid wasting the scarce currency, namely by banning import of non-essential and luxury goods.

The Industries Minister Reza Fatemi-Amin said “foreign trade mechanisms need reform to help boost foreign trade”.

He pointed to expedite programs to operationalize the initiative to enable businesses to use cryptocurrency to pay their import bills.

Relevant government bodies have been working on ways and means for the use of digital currencies to evade international restrictions imposed on trade and money transfer to and from the country as a result of the 2018 US sanctions.

In late 2020, the government ratified regulations to legalize cryptocurrency mining that allows digital currency to be used for imports. The measure, proposed by the CBI and Ministry of Energy, requires cryptominers to sell the coins they mine only to the CBI.

Last April the CBI said henceforth banks and licensed moneychangers may use cryptos mined by authorized miners in Iran to pay for imports.

Using cryptos businesses can trade with the currency no matter where they are in the world, without using third-parties, namely banks. Blockchain transfers payment more quickly and cheaply than the currently used networks such as SWIFT.

It also reduces transaction time. Blockchain commissions are lower and without maximum limit, which is especially advantageous for export-based SMEs.