Change in the Governor of Iran's Central Bank; Hemmati Replaces Seif

The Iranian government, led by Hassan Rouhani, has voted to appoint Abdolnaser Hemmati as the new governor of the Central Bank. This change comes after Mahmoud Vaezi, Rouhani's chief of staff, announced cabinet changes. According to Iranian news agencies, based on this vote of confidence during the government meeting on Wednesday (July 25), Mr. Hemmati will succeed Valiollah Seif. Tasnim News Agency reported on Wednesday that the prices of gold and currency have decreased, stating that 'initial prices from the gold and currency market indicate that the market's reaction to the change in the governor of the Central Bank has been positive.' Ahmad Alavi, an economics professor in Sweden, told Radio Farda that there are doubts about the sustainability of this positive impact on Iran's financial market. This economist stated: 'It seems that this psychological shock, along with several political actions by regime leaders and the U.S. government, has diminished, and tensions in financial markets will resume.' According to Ahmad Alavi, 'In the short term, Central Bank managers can only take positive actions when the political and international environment is calm and initial trust in them increases with more tangible actions.' The ISNA news agency reported that the Iranian president introduced the new Central Bank governor as 'an educated, knowledgeable person with valuable experience in banking and insurance, energetic, active, and possessing a strong and good spirit and capability.' President Rouhani mentioned that 'reforming the banking system, financial and monetary policies, improving banking relations with the world, developing bilateral monetary agreements, and preserving and safeguarding foreign currency reserves' are among the priorities for the new Central Bank governor. Hemmati, 61 years old and holding a PhD in economics, has been appointed as the new Central Bank governor at a time when Iran is on the verge of the return of U.S. sanctions against its nuclear program, and fluctuations in currency and gold prices have caused turmoil in Iran's monetary market. Rouhani also praised Valiollah Seif, especially for what he called 'standing firm against unauthorized financial institutions,' describing him as 'a very honest and valuable manager.' Abdolnaser Hemmati previously served as the CEO of Sina Bank, the National Bank of Iran, and the head of the Central Insurance of Iran, and he was appointed as Iran's ambassador to China in early July of this year. He has also held various responsibilities at the Islamic Republic of Iran Broadcasting, including the political deputy of this organization. The IRNA news agency, affiliated with the Iranian government, wrote that currently, 'the banking and monetary system of the country is facing numerous problems such as high liquidity, loss-making financial statements, banks' non-compliance with interest rates, a high volume of frozen assets, and overdue and defaulted loans, and Hemmati is expected to first stabilize the banking system.' Previously, alongside the rising prices of currency, gold, cars, and household appliances, Valiollah Seif, the former governor of the Central Bank of Iran, attributed the increase in gold prices in the market to 'psychological issues' and 'exaggeration of some issues.' These statements by Seif and his overall performance regarding currency rate control have faced criticism not only from official conservative officials and some members of parliament but also from social media users, putting pressure on Rouhani's government for this reason. Hassan Rouhani stated in his cabinet meeting on Wednesday: 'In the course of our efforts to neutralize the U.S. conspiracy, if necessary, we will add fresh forces to our team.' Mr. Rouhani said: 'In banking matters, we need effort and cooperation with the world, and despite the U.S. conspiracies, our Central Bank has made appropriate efforts in this regard. However, despite all these efforts, today's conditions necessitate that fresh forces enter this matter. We hope that with the selection of appropriate tactics and methods, we will witness good developments in currency, economic, and banking issues.' Seif: Travel currency will not be completely cut off. The former governor of the Central Bank of Iran, one day before his dismissal, commented on the rumor of stopping travel currency payments from August, stating that 'travel currency will not be completely cut off, but decisions may be made in this regard.' He stated, 'The method of allocating currency to travelers is under review, and decisions may be made in this regard as we accept that the conditions for allocating travel currency are not suitable and a new decision must be made.' In recent days, following currency fluctuations despite the determination of the official currency rate, Valiollah Seif also announced the commencement of a 'secondary currency market' in Iran's currency market, where the rate will be determined by agreement between importers and exporters. Meanwhile, Mohammad Reza Tabesh, a member of the Planning, Budget, and Calculations Commission of Parliament, told the House of the Nation website that 'due to the deficiencies of the NIMA system and the secondary market, a third currency market is forming.'