With speculations about the removal of the governor of the Central Bank of Iran, Abdolnasser Hemmati, turning into reality, the CBI is waiting for a change of guard.
Running in the presidential elections in mid-June, Hemmati confirmed that President Hassan Rouhani wanted him to leave because his election campaign could interfere with his duties as the top banker.
“The president is of the opinion that my candidacy in the election could have an impact on the banking and monetary system. He reportedly has met several economists to find a replacement,” the outgoing governor told Clubhouse Saturday evening.
He was not present in the meeting of the government's Economic Coordination headquarters on Sunday in which the CBI vice governor Akbar Komijani took part. Hemmati told state TV he had delegated his responsibilities to Komijani.
Unconfirmed reports say his most likely successors are Komijani, Muhammad Nahavandian, the vice president for Economic Affairs and Hamid Pourmohammadi, deputy for economic affairs of the Plan and Budget Organization.
Later on Sunday Pourmohammadi said he was offered job but he rejected it because he was not prepared to assume the new responsibility.
In related news, word has spread that Hemmati’s preoccupation with the election campaign was not the sole reason for his unexpected exit.
Local media recently reported on his mounting disagreements with Rouhani over key monetary issues. Hemmati had criticized the government for its poor fiscal discipline and forcing the CBI to pay the government the rial equivalent of “non-existent foreign currency” held with the National Development Fund of Iran”, the sovereign wealth fund.
Hemmati often complained that resorting to NDFI forex assets under circumstances where such assets are not accessible due to the US economic blockade was the main cause of galloping inflation the unprecedented increase in money supply.
On multiple occasions the government tapped the NDFI for emergency needs, namely to control the Coivd pandemic. As per procedures the CBI pays the rial equivalent of currency borrowed from the NDFI that has led to the creation of fiat money.
A former head of the Central Insurance company of Iran, Hemmati succeeded Valiollah Seif at the CBI in July 2018. One of his achievements as the CBI boss was the launching of open market operations to develop a regulated framework for better controlling the borrowing of banks from the CBI. OMO enables central banks to buy and sell securities in the open market in order to expand or reduce the money supply.
