Central Bank Governor: Iran Will Be Among Global Emerging Economies

According to the Central Bank Governor, the historic position of implementing the JCPOA and lifting sanctions could place Iran among the ranks of emerging economies globally. Valiollah Seif, the Governor of the Central Bank of Iran, stated on Saturday, March 5, at the second Iran-Europe banking and business conference in Tehran, that Iran is currently in a historic position. He said, "Despite the slowdown in economic growth in 2015, the outlook for this growth based on domestic and international forecasts in the coming years is bright, and the Iranian economy will be able to achieve economic growth exceeding five percent in 2016." Mr. Seif considered the implementation of the JCPOA and the lifting of economic sanctions as the biggest recent transformation in Iran's economy and added, "This historic position can place Iran among the ranks of emerging economies globally." The Central Bank Governor also mentioned the impacts of the JCPOA, stating, "With the implementation of the JCPOA, Iran's political and economic risks will significantly decrease, and with the development of foreign trade, financial opening of the government, and strengthening of domestic and foreign investments, the process of growth and development of Iran's economy will enter a new path." Mr. Seif further outlined the Central Bank's currency policies over the past two years: "Maintaining stability in the currency market, reducing currency fluctuations, optimizing resource allocation, and meeting the needs of economic factors." He also noted that the business environment index in Iran, which was 153 in 2014, has decreased to 130 and 118 in 2015 and 2016, respectively; it is expected that the improving trend of these indices will continue in the coming years. Efforts to achieve single-digit inflation and control inflation rates were also discussed by the Central Bank Governor at the Iran-Europe banking and business conference. Valiollah Seif stated regarding inflation control in recent years alongside the monetary discipline of the eleventh government, "The Central Bank has succeeded in bringing the inflation rate close to single digits, such that the inflation rate decreased from 40.4 percent in October 2013 to 12.6 percent in February of this year, and the year-on-year inflation growth of the consumer price index also decreased from 45.1 percent in June 2013 to 8.9 percent in February." According to this senior banking official, the Central Bank is determined to continue this policy until achieving a stable single-digit inflation rate. Mr. Seif also emphasized the important role of the Central Bank in the economic reforms carried out in the past two years, stating that "the Central Bank has managed to significantly control and reduce inflation in Iran's economy by controlling the monetary base and liquidity growth on one hand and appropriate guidance on the other." Iran's interest in mutual cooperation with European banks and welcoming foreign investors were other points raised by the Central Bank Governor at the conference. Valiollah Seif stated that Iran's large domestic market provides a suitable ground for mutual cooperation between Iranian and European banks, saying, "Investment banks will find the opportunity to access a new market, and ultimately, mutual investments between Iranian and European banks through establishing branches, representation, and shareholder relationships will create valuable opportunities for both parties." Mr. Seif invited foreign investors to participate and invest in Iran, saying, "I invite all investors, service institutions, and European bankers to actively participate in the post-sanctions environment to cooperate and take advantage of the unique opportunities of Iran's economy, focusing on employment and exports in our country." The second Iran-Europe banking and business conference is being held from Saturday to Tuesday, March 5 to 7, with the presence of domestic and foreign guests in Tehran, hosted by the Monetary and Banking Research Institute of the Central Bank. After the lifting of sanctions, Iranian economic and trade officials have high hopes for establishing trade and banking exchanges between Iran and Western countries, especially European ones. However, in mid-February, AFP reported that despite the lifting of nuclear sanctions, the status of relations between European banks and Iran remains ambiguous, and they are cautious and waiting for the situation to clarify. Following a recent visit by Iranian President Hassan Rouhani to Italy and France, billions of dollars in contracts were signed between the parties. Additionally, as part of ongoing trade and economic exchanges between Iran and Italy, on February 7, representatives from 197 Italian companies, associations, and banks entered Tehran as part of a 310-member delegation. On the other hand, the economy ministers of Iran and Japan signed a memorandum of cooperation on February 5, under which two Japanese financial institutions will provide financial facilities for the implementation of joint economic projects in Iran up to $10 billion. Following international sanctions and unilateral sanctions by the US and the West, Japan had also reduced energy imports from Iran.