Business And Markets

CBI Has a New Boss as Rial Falls to Record Low

CBI Has a New Boss as  Rial Falls to Record Low
CBI Has a New Boss as  Rial Falls to Record Low

Reza Farzin, director of Bank Melli Iran, was appointed Thursday as governor of the Central Bank of Iran. He replaces Ali Salehabadi who as the helm for over a year during which the national currency plunged to record lows. 
Farzin is a former head of the National Development Fund of Iran and is a former deputy economy minister. He served as a board member of the Karafarin Bank reducing its NPL ratio from 25% to 4.5% and improved its profitability. 
He was appointed as the CEO of Bank Melli Iran last year. Farzin holds a PhD in Economics and is an instructor at Allameh Tabatabaei University. 
The CBI's inability to control the chaotic currency market is said to be a primary reason for removing Salehabadi from the top banking job. 
No official reason was given for Salehabadi’s removal. How the change can or will address the historic decline in the rial, though,  remains to be seen. 
In an interview with IRIB soon after his appointment, Farzin said he will focus on controlling the skyrocketing inflation and the forex rates. He did not elaborate.
The average goods and services Consumer Price Index in 12 months ending Nov. 21 increased by 50.2% for the first decile (the lowest income households) and jumped 41.7% for the 10th decile (the highest income).
The incoming CBI boss said the CBI will rewrite forex policy in  a bid to “stabilize rates and help address the concern of businesses.”
"Past policies had insufficiencies that must be redressed. A big part of demand for forex is supplied via the Nima platform and our ultimate goal is to stabilize rates in the  Nima system near 285,000 rials," IBENA quoted him as saying. 
Nima is an online platform affiliated to the CBI where exporters sell their overseas currency income and companies buy for importing goods, machinery, equipment and raw material.
The CBI, according to Farzin, has enough resources to meet people's need for foreign currency using its various platforms. 
"However, we simply cannot ignore the free market because rates in this market impact businesses decisions…Our goal is to gradually curb the need for buying currency in the open market.”

The US dollar continued to rally in the free market on Friday to buy 414,000 rials, gaining 11,000 rials or more than 2.65% compared to the day before. 
The euro gained 2.74% on Wednesday and was quoted at 441,240 rials, the UAE dirham gained 0.82% to be tagged at 121,000 rials, Eqtesad News reported.
Gold prices also shot up on Thursday. The Emami gold coin was quoted at 226.95 million rials, up 3.88% in one day. 
Half Bahar Azadi coin rose 3.46% on Thursday to buy 130 million rials. The Quarter Bahar Azadi coin ended Thursday trade at 100 million rials. One gram of 18-karat gold changed hands at 19.16 million rials.


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