Seif: Forex Policy Unrelated to Elections

Foreign exchange rates should be in line with economic realities but in order to forestall speculative activities, the Central Bank of Iran is keen on curbing the potential volatility that may arise from political events, the governor of CBI said.

"CBI does not predict the currency rates but tries to prevent any shock to the foreign exchange market," Valiollah Seif was also quoted as saying by ICANA.

Iran will hold a presidential election on May 19 in a race where the rivals of incumbent President Hassan Rouhani are attacking his economic record.

Seif noted that it is common in countries with oil revenues to witness shocks in their currency market when the oil price falls, "but we managed the market in Iran to follow a steady trend".

The CBI chief believes that tranquility in the currency market led to a relatively stable economy during the past four years.

"Part of the comments concerning the currency market is a specialized view and acceptable, while others seem to have political motives," he added.

Seif further said CBI's policies are not related to the upcoming presidential elections, but aim to control the market with a reasonable exchange rate.

The Central Bank has managed to control foreign exchange rates and promote stability in the forex market despite a turbulent season that saw the rial drop to historic lows against the dollar.

In the Iranian months of Azar and Dey (Nov. 21, 2016, to Jan. 19, 2017), the currency market witnessed fluctuations that were mainly caused by a peak in seasonal trips (pilgrimages to neighboring Iraq) and the US presidential vote, but the CBI restored stability to the market.

President Hassan Rouhani has described the restoration of market stability after a period of upheaval as the biggest achievement of his nearly four-year tenure that will end in August.

"Although our friends are sometimes divided over the biggest achievement of the government, I believe it's the return of calm and stability to the market," Fars News Agency quoted the president as saying on Feb. 27, 2017.