The Governor of Central Bank of Iran Abdolnasser Hemmati says the government will expand barter trade as the US sanctions make export transactions difficult.
In a post on his social media account on Friday, Hemmati said expanding barter deals will help promote foreign trade that has suffered due to the tough US sanctions (read economic war) and the coronavirus pandemic.
“To grow foreign trade and make the best use of domestic production capacity, besides other options the barter system [oil for goods] will be expanded,” he wrote.
In a meeting between Hemmati and some ministers on Thursday, the Oil Minister Bijan Namdar Zanganeh spoke about a plan to launch a “single window” system to facilitate imports of essential goods in lieu of crude oil export.
IRNA quoted Zanganeh as saying that the proposal for creating the single window has been approved by President Hassan Rouhani and “the plan will be put into operation in a week".
The United States in 2018 abandoned a landmark nuclear deal Tehran had signed with the six world powers in 2015 and unleashed a new wave of economic sanctions against Iran described by the acrimonious President Donald Trump as the "toughest ever".
The historic decline in oil exports, crippling US restrictions on banking and money transfer and difficulties in importing raw material and intermediate goods have disrupted Iran’s economy and battered businesses across the spectrum. The pandemic has become another major problem making a bad situation worse.
According to Mehdi Mirashrafi, head of Islamic Republic of Iran Customs Administration, Iran’s non-oil foreign trade stood at 62.84 million tons worth $30.3 billion in the first half of the current fiscal year (March 20-Sept. 21), indicating a 28% decline in value compared to the corresponding period last year.
H1 non-oil exports accounted for 46.31 million tons worth $13.56 billion and imports reached 16.52 million tons worth $16.78 billion. As a result, the trade deficit was $3.22 billion.
Compared to the corresponding period last year (March 21-Sept. 22, 2019), export and import registered 35% and 21% decline in value, respectively.
Iran’s foreign trade was worth $42.16 billion during the same period last year, with exports hovering around $20.94 billion and imports $21.22 billion.
$18.5b for Import
Regarding the CBI’s efforts to secure currency for imports of raw material, Hemmati said more than $18.5 billion was sourced in the past seven months (March 21- October 21).
The currency included resources allocated directly be the CBI and repatriated earnings of exporters sold in the secondary foreign exchange market, dubbed as the Integrated Forex Deals System, known locally as Nima.
Nima is a trade platform developed and supervised by the CBI used as a venue where companies sell their export earnings at rates lower than the open market.
The senior banker said the CBI is supplying currency for import despite the devastating effect of Covid-19 on overseas earnings and the steep decline in international crude oil prices.
Foreign trade was disrupted due to massive border closures imposed by most countries to curb the pandemic and the failure of importers of Iranian goods and services to meet their financial and other commitments.
