The Central Bank of Iran’s (CBI) top policymaker says the unification of Forex dual exchange rates, which was a promising issue during the first run of President Rouhani, will be pragmatic during the 2nd term but the issue has not been finalized and will be pursued during the administration’s second four-year term.
The longstanding plan to adopt a controlled floating rate failed due to what officials refer to as conflicts in international ties. The setback disappointed the country’s private sector and leading business figures who hoped for a single exchange rate policy after the country had reverted to multiple rates when sanctions targeted the country’s financial relations.
“Based on our plans, the unification of foreign exchange rates will be implemented early in the new government,” CBI Governor Valyollah Seif said in the last night interview with the state TV.
He and several other high-ranking officials had projected that the rates would be unified by the end of the previous fiscal year in March, following the implementation of Iran’s nuclear accord with world powers, which promised vastly improved prospects for the Iranian economy.
However, as Seif stressed: “It has taken much longer than anticipated for the Iranian banking system to reconnect with major international counterparts, effectively preventing the rate unification”.
“We thought that following the nuclear deal, our banking ties would once again stand at a suitable level and we can unify the rates, but the plan is yet to be implemented because it has been delayed as a result of a lack of international ties,” he said.
The CBI chief pointed to the position of Iran with regard to the Financial Action Task Force, the global standard-setting body on combating money laundering and financing of terrorism, which in late July voted to extend the suspension of active countermeasures against Iran indefinitely as it had done a year before.
Seif said the country is continuing measures in line with boosting conformity with FATF standards and predicted that the intergovernmental organization is expected to treat Iran better in its future meetings.
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