Rate Unification Tops New CBI Deputy’s To-Do List

Following last week’s appointment of Seyyed Ahmad Araqchi as the head of Foreign Exchange Department at the Central Bank of Iran, the new deputy is expected to oversee the long overdue task of unifying the dual foreign exchange rates–a promise central to the mission of Valiollah Seif, the CBI governor.  

Araqchi, who must first narrow the gap between the official and parallel market rates, has replaced Gholamali Kamyab who is now CBI’s deputy for international affairs.

According to the news website of the Iran Chamber of Commerce, Industries, Mines and Agriculture, CBI hopes to give fresh momentum to floating the rial with this appointment.  

Araqchi had served as a board member and senior executive deputy at the Securities and Exchange Organization of Iran.

Iran currently uses two exchange rates: a free market rate that stood at 38,130 rials to the US dollar on Monday and an official exchange rate for state transactions. CBI fixed the official rate at 32,859 rials on Monday.

The government began to gradually increase the official exchange rate for it to approach the unofficial market rate and reduce the list of imports eligible to receive foreign currency at official rates.

A few days ago, Seif expressed CBI’s desire to unify the foreign exchange rate during a TV program.

“Forex unification is an easy job and the relevant directive is ready for notification,” he said.

In a separate remark, Masoud Khansari, the head of Tehran Chamber of Commerce, Industries, Mines and Agriculture, also said on Sunday rate unification is “one of the necessary schemes” that the government must execute during its second term that began this month.

The idea of forex rate unification has been floated for a numbers of years, but has yet to become a reality.

Seif and former economy minister, Ali Tayyebnia, along with other major economic officials, had repeatedly promised that the forex rate would be unified by the end of last fiscal year (March 20, 2017) but that did not materialize due to weak banking relations with the world.