Economy, Business And Markets

CBI Says $30b to Be Freed Within a Week

CBI Says $30b to Be Freed Within a Week CBI Says $30b to Be Freed Within a Week

The bulk of Iran’s frozen foreign assets worth $30 billion will be released next week soon after the nuclear accord with the six world powers takes effect, Valiollah Seif, governor of the Central Bank of Iran said late Tuesday.

 “The imminent lifting of the banking sanctions, unfreezing of assets blocked overseas and reconnect with the global banking system will boost the domestic economy,” he said.  

Speaking on the sidelines of the Fifth Annual Conference on E-Banking and Payment Systems, the senior official took note of the recent volatility in the currency market and said the fluctuations were caused by “psychological factors” and are transitional.

Using his oft-repeated remarks, he again dismissed allegations that the government is intentionally devaluing the rial to sell its dollars and plug deep holes in the annual budget. “The government will never manipulate (currency) rates to finance its plans and projects or fix the deficits,” he was quoted as saying by IRNA on Tuesday.

Rumors that the government is behind the recent surge of hard currency rates, notably the US dollar, gained impetus after oil prices began the downward spiral last year – plunging from the January high of $57 a barrel to nearly $32 in late mid-December.  

He pointed to CBI measures to address the banking woes and alleviate the credit crunch saying that entering the inter-bank market has been one of the regulator’s successful policies to solve banking sector problems. “We were able to lower inter-bank interest rates from 28% to 20% which is now showing its positive effect on both deposit and lending rates.”

Interest rates should be compatible with inflation rates but the current gap between the two is rather wide and unacceptable according to Seif. He dismissed setting rates by decree saying such diktats are simply not sustainable and give rise to economic shocks. “We need to create a safe and stable landscape for investors to encourage them to put their money in investment projects.”  

Seif also pointed to the multiplying bad loans saying that the only way for lenders is to go to the courts to claim their unpaid debts. “The lenders’ credit crunch is due largely to the blocked assets and the CBI is trying to find workable means to settle the issue.