Economy, Business And Markets

Germans Call on CBI’s Forex Chief

Germans Call on CBI’s  Forex Chief Germans Call on CBI’s  Forex Chief

The impressive history of trade with Iran can swiftly restore Germany as the top trade partner of the country, Gholamali Kamyab, Vice Governor for forex affairs at the Central Bank of Iran said in remarks posted on the bank’s official website.

Addressing a visiting German trade mission headed by the state of Lower Saxony’s Economy Minister Olaf Lies on Sunday, he said “German products are well known and recognized in the Iranian market and this should help German businesses regain their status as the top trade partner in Iran with minimum marketing cost.”

However, he added that the key role of the banking network should not be neglected and called on the officials of both countries “to make every effort to restore two-way banking relations.”

Kamyab acknowledged that Tehran needs technical and financial help in a wide range of industries including, but not limited to, auto manufacturing, infrastructure, energy, aviation and tourism and hoped for an early return of German investment and technology transfer as Iran embarks on the huge task of economic rebuilding after the lifting of the nuclear-related sanctions.

On the progress to unify the exchange rate regime, the senior official said “The regulator is determined to unify the exchange rate regime. However, the international sanctions and restrictions on transferring hard currency have slowed down the process.” Nevertheless, the CBI has managed to reduce the gap between the official and market forex rates from 20% to 10%, he added.

 Containing Forex Fears

On the future of foreign exchange rates in post-sanction period, he refused to be drawn in his capacity as a top CBI official in charge of forex affairs. Nevertheless, he said he expects the rate to be determined “based on economic ground realities and market forces.” He stressed that the CBI normally checks temporary fluctuations and anxiety that may lead to ripple effects in the economy.

Noting that currently ten or twelve Iranian commercial banks are already connected to the SWIFT, Kamyab hoped that once the international financial and banking sanctions are lifted all the banks will reconnect to the financial messaging system that transmits and tracks international transactions.

Noting that the German visit comes after almost 15 years, Olaf Lies said “Back in Germany, expectations are high for Iran-Germany trade to hit $12 billion within two years.”

In the past, Iran’s top five trade partners included Germany, Italy, France, Austria and Japan. However, upon the imposition of international sanctions the five were replaced by China, India and South Korea.

The 100-strong trade team also called on economic stakeholders on Saturday in the Iran-Germany Trade Forum, jointly hosted by Tehran Chamber of Commerce, Industries, Mines and Agriculture and Iran-Germany Chamber of Commerce.

Lower Saxony is Germany’s second-largest federal state in terms of area and it’s fourth biggest population-wise, with some eight million inhabitants. Its outstanding infrastructure of road and rail links and waterways makes for extremely rapid connections to both domestic and international markets and forms a pivotal transport hub for trans-European goods flow. Its sea ports are a gateway to America, the Far East and rest of the world. Volkswagen has its base in Lower Saxony.