In a note posted on his social media account, Abdolnasser Hemmati said the report was “biased, false and drawn from incomplete data”.
In its latest World Economic Outlook report, the International Monetary Fund said the central bank’s “gross official reserves” has declined sharply from $122.5 billion in 2018 to $12.4 billion in 2019. The reserve had further declined to $4 billion in 2020, it claimed.
It, however, forecast that the currency reserve would increase to $12.2 billion in 2021 and $21 billion in 2022.
“This is an egregious mistake and a false report drawn from deficient data. Publishing incorrect estimations without CBI approval is not befitting of the IMF,” Hemmati wrote on his Instagram account.
Rejecting similar forecasts, the CBI has usually refused to announce the accessible forex reserves “due to the sensitivity of the issue.”
However, the reserves apparently have declined in the past three years, especially under the tough economic sanctions unleashed by the United States that particularly targeted Iran’s oil export, the lifeblood of the economy.
The US economic blockade has also cut off Tehran’s financial ties to the global financial institutions, rendering access to forex revenue difficult, if not impossible.
Friction between Tehran and Washington has heightened since 2018, when the former US president Donald Trump pulled out of the 2015 nuclear deal Iran had signed with six world powers and imposed new sanctions to cripple Iran’s economy.
Hemmati earlier acknowledged that the total oil export revenue in fiscal 2019-20 and 2020-21 was less than $20 billion, which is locked up in foreign banks due to the sanctions. Iran’s oil revenue was around $40 billion a year prior to the new US restrictions.
Hemmati also rejected reports about the CBI’s forex assets in foreign banks, saying “data about these resources and their status is with the CBI and statements in this regard by non-responsible people is uncalled for.” He did not elaborate.
Forex Rate Policy
The senior banker referred to the relative stability in the currency market, linking it “to concerted efforts by the CBI, cooperation of exporters in repatriating their overseas forex income and a better economic outlook.”
He reiterated that the regulator sets currency policy based on “accessible currency reserves” without considering currency resources blocked overseas.
“CBI’s access to these resources would certainly help boost its regulatory clout in the market.” Hemmati said if and when the forex assets overseas are unlocked the CBI would channel it gradually to restore stability in the market without haste letting the forces of demand and supply set the trend.
The CBI says it strongly opposes injecting currency in the chaotic market to curb rates. Earlier in the month, Hemmati said the CBI gives higher priority to currency market stability rather than curbing exchange rates.
Discussing CBI polices on Clubhouse, he said a sharp decline in forex rates would only add to capital outflow from the country.
"In my opinion forex rates should not fall to levels that tempt capital outflow," he said, in response to a question about the potential impact of unfreezing the billions of forex assets blocked overseas.
"The CBI will not be injecting the unlocked forex in the market. That will not happen. Our currency intervention will be premised on policies that don't allow capital flight."
In late 2020, the Economist Intelligence Unit estimated the CBI’s currencies in foreign banks at $19 billion, most of it blocked and inaccessible due to US sanctions against Iranian banks.
A big slice of money is trapped at South Korea banks for years. The East Asian country, a close military and economic ally of the US, has blocked at least $7 billion and says it cannot unlock it due to the sanctions.