Governor of the Central Bank of Iran: Currency Rates Will Equalize After Sanctions Are Lifted

Valiollah Seif, the Governor of the Central Bank of Iran, has reiterated that if international sanctions against Tehran's nuclear program are lifted and banking relations are enhanced, "the implementation of the currency unification policy will definitely be pursued with necessary measures." The single exchange rate policy was first implemented in the Islamic Republic at the beginning of the 1990s but did not last long. The Central Bank also attempted to unify the exchange rate at the beginning of the 2000s. Iranian media and news networks have again raised the possibility of a single exchange rate and currency unification in the past couple of years. Mr. Seif himself emphasized last year that this policy is "one of the main programs of the Central Bank." However, ISNA news agency reported in December 2014 that the definitive entry into this policy has "not been confirmed." On June 10, the Governor of the Central Bank of Iran reiterated the promised policies of this bank at the annual conference on "Monetary and Exchange Policies," stating, "After all conditions are prepared in a professionally and consequence-free manner, we will confidently proceed with the unification of the currency." According to Mr. Seif, the Iranian government is "seeking a desirable and managed implementation" of this policy. The public relations department of the Central Bank stated on June 8 that in an interview with Akbar Komijani, an official of the Central Bank, it was mentioned that "if suitable prerequisites are prepared, the currency unification program will be executed swiftly and accurately." He noted that over the past two years, the currency market has distanced itself from "turbulence and speculation" and that "its fluctuations have also been largely reduced." The Governor of the Central Bank has also expressed similar sentiments, stating that "significant stability has prevailed in the currency market." A report from the Central Bank of Iran in May indicated that the overall approach of the Central Bank's policies in 2014 was based on "enhancing monetary discipline, maintaining currency market stability, and ensuring appropriate financing for production." In recent years, during Mahmoud Ahmadinejad's presidency and the onset of international sanctions against Iran's nuclear program, the Iranian economy faced various challenges, including a tenfold increase in liquidity, which itself affected the rise in currency rates. Central Bank officials had previously stated that a rate of 2900 to 3000 tomans is a suitable rate for currency.