Iran cen­tral bank repa­tri­at­ing for­eign bank de­posits

The Pak Banker - - Company& -

TEHRAN: The Cen­tral Bank of Iran has de­cided to repa­tri­ate an un­spec­i­fied amount of its de­posits from for­eign bank ac­counts, its gover­nor said on Mon­day, cit­ing global eco­nomic con­di­tions as the rea­son.

"The CBI de­cided to lower the vol­ume of its for­eign de­posits and trans­fer them in­ward by de­posit­ing them at do­mes­tic banks," the of­fi­cial IRNA news agency quoted Mah­moud Bahmani as telling a bank­ing sem­i­nar.

" It was agreed these de­posits should be used to meet the fi­nan­cial needs of do­mes­tic projects through hard cur­rency rather than ri­als so that the do­mes­tic in­fla­tion rate would not be ag­gra­vated," he said.

Iran has come un­der tighter eco­nomic sanc­tions since June, aimed at pres­sur­ing it to curb its nu­clear pro­gramme which some coun­tries fear is aimed at mak­ing atomic weapons. Some of the mea­sures re­strict fi­nan­cial trans­ac­tions.

In Au­gust, Bahmani said Ira­nian as­sets had been with­drawn from Euro­pean banks in an at­tempt to foil the sanc­tions. Then as now he gave no fur­ther de­tails.

The repa­tri­a­tion of funds might in­di­cate con­cerns about Iran's abil­ity to ac­cess its cash due to sanc­tions or a need for more hard cur­rency in Iran to pay for in­vest­ment projects, some of which have suf­fered from the with­drawal of for­eign com­pa­nies un­der sanc­tions pres­sure.

In ad­di­tion to the sanc­tions pres­sure, the Ira­nian econ­omy is un­der­go­ing a ma­jor shakeup as the govern­ment slashes the bil­lions of dol­lars in sub­si­dies it pays ev­ery year to hold down prices of es­sen­tial items. The pol­icy be­gan in earnest on Sun­day when the price of gaso­line quadru­pled. Ah­madine­jad calls move to even­tu­ally elim­i­nate some $100b of sub­si­dies "the biggest eco­nomic plan in the past 50 years". While econ­o­mists say the mea­sure is needed to curb waste­ful con­sump­tion they say it risks stok­ing in­fla­tion as prices of food, fuel and trans­port soar. -PB News

IS­LAM­ABAD: CM Pun­jab Shahbaz Sharif called on Prime Min­is­ter Syed Yusuf Raza Gi­lani at PM House. -App

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