The Economy Minister Ehsan Khandouzi said noticeable progress has been made in economic and banking issues with trade partners in neighboring and friendly countries.
"Good deals have been made in financial, banking, international settlements and currency issues with partners in neighboring and allied countries…Some agreements have already been implemented, including messaging apps and settlement networks
“However, due to the [US] sanction, our partners have asked Iran to refrain from disclosing details so that we can continue on a secure environment, including ties with the private sectors of different countries," Khandouzi was quoted as saying by SHADA news agency on the sidelines of the 15th FINEX exhibition in Tehran.
The central banks of Iran and Russia signed a deal to connect their national interbank communication and transfer systems to help boost trade and ease two-way bank transactions in January.
Per the deal, 52 branches of Iranian banks and four unnamed foreign banks were to use Iran's local interbank telecom system, known as SEPAM, to connect with 106 banks using Russia's System for Transfer of Financial Messages or SPFS, the website of the Central Bank of Iran said.
Iran's Shahr Bank and Russia's VTB Bank were set to be involved in the pilot program and other lenders are to join gradually.
Elaborating on government plans for cryptocurrencies the minister said, "Since the beginning of the government's tenure [in 2021], there has been a strong emphasis on drawing on the legal capacities of cryptos to support international trade."
He added that "To this end a comprehensive document has been prepared in collaboration with other institutions, including the Central Bank of Iran and the Ministry of Energy, and is currently under review by the Cabinet. When approved, it will help pave the way for a new phase in the use of cryptocurrencies."
Iran's Trade Promotion Organization (TPO) recently said that the government is creating the infrastructure to start using cryptocurrency to pay for imports.
Use of Cryptos
Alireza Peymanpak, the TPO chief, said that the CBI has issued permission for using cryptos for importing goods.
A special platform is in place to connect businesses in Iran to foreign suppliers. "Businesses can use the platform to transfer cryptocurrency to settle import bills," he said
"A platform was necessary to ease money transfers by supplying exporters with cryptocurrency. The platform is also linked to the Comprehensive Trade System and CBI's Currency Allocation Platform."
Use of cryptocurrency was expected to start last fall but was delayed due to the prolonged process of developing the platform, the trade official added.
Back in September, he said in a tweet that the government is “working on the implementation of smart contracts in foreign trade.” He did not elaborate.
Ahmad Salehi, an advisor to TPO, said last week that the groundwork has been prepared for using cryptocurrency in international transactions. "We have reached [preliminary] agreements and permits have been issued for using cryptos for import and export."
In January, the CBI and the Ministry of Industries, Mining and Trade reached agreement to link the CBI crypto platform to the Comprehensive Trade System allowing businesses to use cryptocurrency to settle overseas payments.
Boosting Share Market
Khandouzi emphasized that over the past year and a half there has been meaningful collaboration between the government and the parliament vis-à-vis boosting the capital market. "The capital market is one of the fundamental pillars of the financial system.
When this government started its work there were some 760 active financial institutions. Today there are more than 930." It was not clear what the large number of financial organizations are involved in and how they are helping businesses move forward under the dire economic climate.
He stressed the importance of transparency in the capital market, saying one of the main demands of economic players is predictability, avoiding frequent changes in regulations and procedures to ensure the profitability of listed companies.
The minister expressed the hope that things would change for the better through long-term collaboration with the legislature and focus on key price indicators in key industries, along with steering clear of unhelpful government pricing policy that undermine the profits of major industries.
Justice Shares
Regarding the allocation of the so-called Justice Shares to underprivileged households, Khandouzi said, "The decision to give Justice Shares to families under the coverage of the Relief Committee, Welfare Organization, and support institutions was approved last year. However, the shares were not provided and would be made available this year.
"We hope that the law in the current year's budget regarding these shares will be approved soon. After that the amount of shares for each family will be announced."
Justice Shares are shares of government-owned companies given free to the six lowest income deciles 15 years ago but could not be traded in the stock market until May 2020.
More than 49 million Iranians have the shares and it is estimated that the portfolio of shareholders has grown almost ten times.
There are differing views about the government’s ability to again offer such shares of state companies. Officials in the administration of former president Hassan Rouhani opposed such moves on the premise that the government was saddled with ballooning deficits and cannot afford such largesse.
However, lawmakers and the Majlis Research Center, the parliamentary think tank, then said that the government has large stakes in major companies and should share the pie with low-income households in the form of Justice Shares.
Justice Share portfolios includes 49 state-owned companies in the auto, metal, mining, and agriculture, petrochemical and banking sectors and 35 are listed on the stock market. Another 14 are planning IPOs. Shareholders can now sell 60% of their portfolio in the bourse.
