The government will use overseas currency set to be released in the coming days to bolster budgetary spending, head of the Planning and Budget Organization said.
In a talk with state TV, Masoud Mirkazemi said the money will also be used to expand infrastructure and complete delayed development projects.
“The [unlocked] assets will shared among the government, the National Development Fund of Iran and Central Bank of Iran,” he was quoted as saying by IRNA.
Private sector leaders have responded positively to the government stance, expressing the hope that those in charge would not use the assets for unbridled infusion of foreign currency to tame the chaotic forex market as seen in the past.
“There is anxiety among private companies about how the government intends to spend the anticipated resources,” Mohsen Ehtesham, head of the provincial Bojnourd Chamber of Commerce was quoted as saying by the newsroom of the Iran Chamber of Commerce, Industries, Mines and Agriculture.
“The government should first identify the real needs of the economy before deciding how to spend the money. It’s up to the decision-makers to chart development and infrastructure priorities,” the businessman said.
He voiced concern about possible government aim to use the funds to control the high and rising forex rates, recalling that past governments did so whenever forex revenues increased.
There is concern about how and where the government will spend the released money amid fresh reports that the Raisi administration will soon have access to billions of dollars locked in overseas banks due to the 2018 US economic blockade.
Citing the CBI’s International Department, state TV has confirmed the reports, saying that in recent days a “high-ranking regional delegation” was in Tehran to discuss the issue.
“We reached a consensus on a general framework for unlocking a significant part of the blocked assets in one of the countries,” an unnamed CBI official has been quoted as saying.
Similar reports were confirmed earlier by the Foreign Ministry spokesman in Tehran Saeed Khatibzadeh. “The operational framework for freeing a significant amount of the blocked money has been developed and Tehran will soon have access to it,” he told a weekly press conference.
Assets in South Korea
Local media outlets have put the expected forex at $7 billion, which is almost the same amount blocked in South Korea.
IRNA earlier said the released assets are to be deposited into an Iranian bank account.
“Under the agreed framework, the blocked assets must be released within a few weeks,” IRNA said.
As to how the money would be transferred to Iran, the news agency said it will be through the same channel used in March to transfer a 40-year-old UK debt to Iran.
Following long legal and diplomatic tussles the British government repaid 400 million pounds last month.
The money was an advance payment Iran had given to Britain for Chieftain tanks before the revolution in 1979 that were never delivered.
Citing unnamed UK officials, The Guardian newspaper said the parities chose to use the Bank of Oman as a conduit.
Money transfer via banks to and from Iran became impossible since 2018 when the US imposed new sanctions on the banking and financial sector Donald Trump unilaterally abandoned the 2015 Iran nuclear deal.
Ever since, Tehran and Seoul have been in talks on how to pay the money back to Iran or find ways to use it for importing goods.
South Korea was a major buyer of Iranian oil before the Trumpian sanctions. Iran accounted for almost 15% of Korea’s oil imports at the time.
Home to a massive refining industry, Korea is the world’s fifth-largest oil importer. After the US restricted the use of dollars for transactions with Iran, the CBI created new accounts with Korea’s commercial banks to facilitate trade in won.
The two countries used the accounts based on the Korean currency to continue Korea's imports of oil from and exports to Iran. Those accounts were also frozen after the Trump White House announced new restrictions on trade.
