Iran’s central bank chief ousted to run for president | Business and Economy News


Tehran, Iran – President Hassan Rouhani has fired the head of Iran’s central bank, Abdolnasser Hemmati, for becoming a presidential candidate in the June 18 election.

The cabinet said in a statement on Sunday that Hemmati had been dismissed as his candidacy “prevents him from having a sufficient presence in the central bank and exercising the vital functions and responsibilities of the governor in sensitive areas of money and foreign exchange”.

The cabinet voted to replace Hemmati with his deputy, Akbar Komijani, who also replaced Hemmati at an economic meeting chaired by Rouhani on Sunday.

Komijani has been deputy governor for the past seven years and has about two decades of experience at the central bank.

Had he not been ousted, Hemmati would have headed the central bank until 2023, after which his government could be extended for another five years.

Ebrahim Raisi, considered by far the leader in the elections, remains in office as head of the judiciary.

A veteran of the Iranian banking and insurance industry and a former state television journalist, Hemmati took the helm of the central bank in July 2018 at a tumultuous time when the Iranian currency, the rial, had already been very successful.

Rial was in free fall as then-US President Donald Trump had abandoned the 2015 Iranian nuclear deal with world powers the previous May, imposing harsh unilateral sanctions.

Hemmati’s predecessor, Valiollah Seif, became the target of judicial investigations and several of his deputies were arrested. A senior prosecutor said earlier this month that one accusation has been issued against Seif for “wasting” more than $ 30 billion and 60 tons of gold reserves.

But the rial continued its sharp devaluation below Hemmati and hit a 320,000 nadir against the US dollar on the open market in October 2020, while changing hands for less than 40,000 per green dollar before the Trump administration’s “maximum pressure” campaign on Iran.

Since then, the besieged currency has partially recovered and strengthened to a rate of about $ 210,000 last month. talks in Vienna to restore the nuclear deal and lift U.S. sanctions continue. But it has since devalued again and reached $ 240,000 on Sunday.

A dependent central bank

Iran’s central bank suffers from a sharp lack of independence from the government, and the excessive printing of money has been one of the main factors contributing to rampant inflation over the past four decades.

Legislation to increase the independence of the regulator has lagged behind in several parliaments for more than a decade.

In this climate, presidential candidate Hemmati has been trying to back down from a critical account that he says is one of the main authorities responsible for the current economic hardships that include inflation above 40%.

He said earlier this week that he has risked his reputation for changing long-standing monetary and exchange rate policies, and said the economic situation could be much worse if it were not for dealing with those who wanted to keep the status quo.

In an election that is expected to have low voter turnout amid public disillusionment, the candidate has also said he wants to be the voice of the “silent majority.”

Hemmati was one of those who opposed a controversial policy initiated by the Rouhani administration in 2018 to set an artificial rate of 42,000 rials on the dollar to “unify” the country strongly. multiple exchange rates. This rate still persists to this day, but is only used for imports of essential goods.

But it is of the same thought as Rouhani and his moderate administration on a number of issues, mainly on the need to ratify the rest of the financial resources. transparency legislation to complete Iran’s action plan with the intergovernmental watchdog, the Financial Action Task Force.

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