Veliollah Seif: The 4200 Toman Dollar Rate Was a Government Decision, Not the Central Bank's

Veliollah Seif, the former head of Iran's Central Bank, stated in an interview with Donya-e-Eqtesad newspaper on Saturday that the decision to set the dollar rate at 4200 tomans in Farvardin 1397 (April 2018) was made by the 'Economic Headquarters of the Government,' which he claims was approved by the government. Seif, who was replaced by Abdolnasser Hemmati in August of this year following a surge in the free market currency prices and criticisms of the bank's policies for unifying the currency rate, discussed the main challenges and events during his five-year tenure as the head of the Central Bank. He emphasized that during his presidency, he had submitted resignation requests on several occasions, but they were not accepted. One of these resignation requests dates back to Farvardin 20, 1397 (April 9, 2018), when Eshaq Jahangiri, the First Vice President of Iran, announced the 4200 toman rate for each US dollar, revealing the government's policy of unifying the currency rate, which was accompanied by numerous Central Bank directives and the launch of various systems. However, ultimately, the government failed to achieve its goals for unifying the currency rate and even controlling the prices of various currencies in the free market. Following the surge in currency prices and the misuse of the government rate currency, several senior Central Bank officials, including Ahmad Araghchi, the Central Bank's currency deputy, were arrested. According to the judiciary spokesperson, Veliollah Seif remains banned from leaving the country: 'He has been investigated once, and if necessary, he will be investigated again, and the case is ongoing because there are other suspects among Central Bank employees and non-employees.' Now, Veliollah Seif states that this policy was decided by the government's economic headquarters and that 'in fact, the Central Bank was merely an executor of the government's decisions from that time and could not have an independent policy from the government's decisions.' Seif mentions that one of his resignation requests relates to that time, although he admits he did not insist on resigning. In part of this interview, he emphasized that it was 'predictable' for the Central Bank that 1396 (2017-2018) would be a difficult year, especially the second half, accompanied by a rise in currency rates. He stated that 'necessary warnings were given to the government and other officials, but there was insistence on maintaining the currency rate within a specific range.' The former head of the Central Bank believes that the government did not respond to these warnings as the Central Bank had expected. According to Veliollah Seif, the Central Bank supplied a total of 18 billion dollars to the market in 1396 (2017-2018) to control the market. He explains that throughout all periods, the Central Bank has intervened in the currency market. He states, 'In fact, the 18 billion dollars supplied to the market not only prevented a surge in currency rates but also provided the necessary foreign exchange resources for this segment of imports.' A significant portion of Veliollah Seif's conversation with Donya-e-Eqtesad revolves around the conflicts between the Central Bank and the government during his management period. Seif states that he aimed to present the Central Bank's position on various issues transparently and openly, which sometimes led to disagreements with Hassan Rouhani. In one part of this interview, he says, 'Sometimes my comments on issues were contrary to what he believed, and at times my objections were very explicit and presented outside the normal course in the cabinet.' He emphasizes that he has tried to pay attention to the fact that 'the head of the Central Bank is not like a minister who is a cabinet member and has more independence; therefore, my relationship with the President is completely different from that of the ministers.' Another focus of Seif's discussion is the emotional and sensational atmosphere surrounding the approval of the four FATF-related bills. He describes this atmosphere as 'emotional and sensational.' According to the former head of the Central Bank of Iran, 'almost all of the FATF standards are requirements and standards that are necessary to implement within the country, and without implementing them, it is impossible to effectively combat corruption.' He considers the main problem in this regard to be the 'emotional and sensational atmosphere' that 'some have knowingly and some unknowingly entered, which has deprived the possibility of rational discussion and peaceful resolution of the issue.' The government of Hassan Rouhani sent four bills to the parliament to meet the FATF requirements, and despite the approval of all four bills in the parliament, only the 'bill to amend the law on combating the financing of terrorism' has received final approval from the Guardian Council. About two weeks ago, the spokesperson for the Guardian Council announced that this council rejected the bill for Iran's accession to the Convention on Combating the Financing of Terrorism, which is referred to as the 'most important' bill related to the implementation of the Financial Action Task Force (FATF) regulations.