Petrochemical companies contributed 40% of the currency available at the secondary foreign exchange market, known locally as Nima, secretary general of Iran's Association of Petrochemical Industry Corporation (APIC) said.
Nima is an online platform affiliated to the Central Bank of Iran where exporters sell their overseas currency income and companies buy it for importing goods, machinery, equipment and raw materials.
Ahmad Mahdavi said there have been cases when exporters of petroleum products and petrochemicals repatriated their export proceeds beyond what was required of them.
“More than 90% of petrochemical firms performed beyond their financial commitments to bring back export earnings,” IRNA quoted him as saying.
Based on CBI rules, exporters are required to sell at least half of their export revenue in the secondary market at exchange rates below the (higher) rates in the open market.
For petrochemical companies this obligation is at least 60% of their earnings.
Law stipulates that at least 10% of the total proceeds of the petrochemical firms must be sold in hard currency. The balance can be used to import goods, machinery and equipment either by the exporting firm or a third party.
Earlier the CEO of National Petrochemical Company, Behzad Mohammadi, said that petrochemical companies sold 85% of their overseas earnings at Nima in the last fiscal year (March 2019-20).
The petrochemical industry generated $10 billion in foreign currency last year, accounting for a quarter of total non-oil exports, he said.
Noting that all petrochemical products are traded via the Iran Mercantile Exchange, Mahdavi said petrochemical manufacturers are in demand in recent weeks due to the rise forex rates.
“Lower petrochemical prices is attracting more buyers,” he said, linking the increasing demand also to higher prices in the future.
Major currencies have gained against the rial over the past several months. The US dollar gained close to 8% in one week. It is now fetches 226,000 rials at Tehran’s free market.
Rates in Nima are lower. One dollar was selling for 169,000 rials in the secondary market and bought for 169,333 rials on Saturday.
The issue of export earnings repatriation has gained added relevance after the turmoil in the local forex market was linked to shortage of currency offered at Nima.
This compelled the central bank to issue an ultimatum asking exporters to expedite repatriation of their overseas earnings by the end of the Iranian calendar month (July 21). Those failing to do so will have their names made public through the media and they may face penalties.
Export companies have not returned $27.5 billion of their overseas revenue over the past two years, the CBI said.
