The Iran Project

Private sector waiting for single forex rates

In his latest remarks to the news website of Iran Chamber of Commerce, Industries, Mines and Agriculture, the chamber’s deputy head talked of new deals in the industrial sector, underlining the importance of exchange rate unification and new openings in international banking.

Referring to the 100 deals made with foreign investors in the industrial sector, Pedram Soltani said, “We have reviewed the list of deals made in the industrial sector and found that most of the agreements were made with state-owned companies and the public sector. The private sector was barely represented in the 100 deals.”

Now these deals need to be put into effect and for that to happen, Soltani believes foreign banking links must be reestablished and the exchange rates unified.

“For large-scale money transactions we need such measures,” he said, “and that is while foreign investors do not see any motivation to import hard currency to Iran because it would be calculated at the (lower) official rates and immediately lose its value. On the other hand, lack of effective banking connections increase trade costs which again does not bode well for foreign investors.”

Noting that businesses are now languishing in the “stand-by mode” after the easing of sanctions, the ICCIMA deputy head said it is natural for businesses to wait for the singe forex rates and new opening in banking ties. “We are waiting and counting the minutes when the banking ties would be reestablished.”

On last year’s negative industrial growth rate and predictions for this year’s growth, Soltani assured that the growth rate for the current year will be positive, though noting that the actual positive growth depends on financial openings like the reconnect to major foreign banks and lending institutions.

By Financial Tribune

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