The Central Bank of Iran said it paid importers of essential goods $6.5 billion via the special Nima market since January 1.
"The money was given for importing raw material, medicine and other basic goods, namely wheat, rice, feedstock," the CBI said Wednesday on its website.
Almost $500 million was paid for bringing in pharmaceuticals, raw material for producing medicine, vaccines, baby formula and other goods ordered by the Ministry of Health.
The major part of the forex ($4 billion) went for raw material for industries, including fibers, wool, rubber and material for tire companies along with machinery and equipment.
Nima is an online platform affiliated to the CBI through which exporters sell their overseas income in the form of hawala. Through the platform companies buy currency for importing goods, machinery, equipment and raw materials.
In this system, importers declare their currency needs, exporters register their proceeds and banks and authorized moneychangers function as brokers.
Last May the government officially put an end to the costly and controversial currency subsides ($1=42,000 rials), aka as preferential currency, which was given to importers of basic goods.
Soon after businesses argued that with the end of the subsidy policy they would obviously need huge infusions of cash for importing raw material to bridge the gap between subsidized forex and open market rates. They urged the government to reconsider and compensate the liquidity crunch.
The government bought 7.15 million tons of wheat worth an estimated 827.86 trillion rials ($2.6 billion) from local farmers since the beginning of the harvest season last March up until mid-September – up 60% in volume on the same period last year, according to Saeed Rad, CEO of the Government Trading Corporation (GTC).
As a matter of policy, the government buys strategic crops, namely wheat, beetroot, tea, barley, cotton boll and oilseeds from local farmers at guaranteed prices to control the domestic market and replenish strategic reserves.
The government has said it earmarked 1,000 trillion rials ($3.5 billion) in the 2022-23 budget to help compensate the elimination of forex subsidies for the poor, fixed-wage earners and those at the bottom of the economic ladder.
Last year (March 2021-22) 30.9 million tons of basic goods worth $19.6 billion were imported, which was up 32% and 60% in volume and value, respectively, on the year before.
An estimated 26.9 million tons of the imports worth $15.1 billion were undertaken using subsidized currency and the rest via Nima.
Role of Nima
CBI Governor Mohammad Reza Farzin earlier said plans are underway for expanding the role of Nima in supplying the chaotic forex market. "Past policies had deficiencies that must be removed. A big part forex is supplied via the Nima platform and our ultimate goal is to stabilize rates in this system at or near 285,000 rials to the US dollar."
The government is struggling to draw on Iran's frozen assets in friendly countries to supply the Nima market. The newly-appointed CBI chief held talks with some of his counterparts in the Persian Gulf in recent months to find ways to access billions of Tehran’s currency assets held overseas due to the US economic sanctions.
He met Sheikh Mansour bin Zayed Al Nahyan, the deputy PM and minister of the presidential court in Abu Dhabi last week and also called on the Qatar Central Bank chief Sheikh Bandar Bin Mohammed Bin Saoud Al-Thani in Doha.
Later, Farzin said the bank had gained access to a big part of the frozen assets in some foreign countries and was using it to control currency rates. However, despite his explanations and those of his predecessor forex rates have long been of the ascending order and have skyrocketed to historic highs.
"We held constructive negotiations with our trading partners including Qatar, the United Arab Emirates, China and Iraq."
The senior banker noted that foreign currency held in China was not attractive for importers using the Nima platform. "Allocation of resources from China [blocked due to the US sanctions] used to take almost 21 days…We have reduced that period now to 48 hours and the resources are being purchased via Nima." The CBI announced on Wednesday that it had supplied the Nima market $100 million from assets in Iraqi banks.
