Iran’s central bank governor was removed from office for running for president. Business and Economic News

Tehran, Iran – President Hassan Rouhani fired Iran’s central bank governor Abdolnasser Hemmati because he became a Presidential candidate In the election on June 18.

In a statement on Sunday, the cabinet stated that Hemati had been removed because his candidacy “prevented him from having sufficient presence in the central bank and unable to perform important duties as president in sensitive areas such as currency and foreign exchange. “.

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

Komijani has served as deputy governor for the past seven years and has approximately two decades of experience in the central bank.

If he is not fired, Hemmati will lead the central bank until 2023, after which his term as president can be extended for another five years.

Ebrahim Raisi has always been considered the front runner in the election, and he still serves as the head of the judiciary.

As a veteran of Iran’s banking and insurance industry and a former reporter of national television, Hematy took the helm of the central bank in July 2018, when the Iranian currency, the rial, had already been hit hard.

Since then U.S. President Donald Trump abandoned Iran’s 2015 nuclear agreement with world powers in May last year and imposed severe unilateral sanctions, the rial plummeted.

Hemmati’s predecessor, Valiollah Seif, became the target of a judicial investigation, and several of his deputies were arrested. A senior prosecutor said earlier this month, indictment Seif was sued for “wasting” more than 30 billion U.S. dollars and 60 tons of gold reserves.

However, the rial continued to depreciate sharply under Hemmati’s leadership and fell to the lowest point of 320,000 against the U.S. dollar on the open market in October 2020, before the Trump administration launched its “maximum pressure” campaign on Iran , The rial changed hands for less than $40,000.

Since then, the troubled currency has partially recovered and rose to an exchange rate of approximately 210,000 per U.S. dollar last month because Vienna talks The resumption of the nuclear agreement and the lifting of US sanctions continue. But it depreciated again and reached 240,000 USD against the U.S. dollar on Sunday.

Rely on the central bank

The Iranian central bank seriously lacks independence from the government, and excessive printing of money has been one of the main factors leading to rampant inflation in the past four years.

For more than 10 years, legislation to improve the independence of regulators has been lagging in several parliaments.

In this case, the presidential candidate Hematy has been trying to refute the critics who say that he is one of the main authorities causing the current economic difficulties, including an inflation rate of more than 40%.

He said earlier this week that he risked his reputation to change long-term foreign exchange and monetary policies, and said that if he hadn’t stood up against those who wanted to maintain the status quo, the economic situation could have been worse.

In an election where voter turnout is expected to be low amidst public disappointment, candidates also expressed their desire to be the voice of a “silent majority”.

Hemmati is one of those who oppose a controversial policy initiated by Rouhani’s government in 2018, which imposed an artificially set exchange rate of 42,000 riyals against the U.S. dollar in order to force “unify” the country’s Multiple exchange rates. To this day, the tax rate still exists, but only for importing essential goods.

But on some issues, he shares the same ideas as Rouhani and his moderate government, mainly on the need to approve the remaining budget. transparency Work with the Intergovernmental Supervisory Agency Financial Action Task Force to complete the legislation of the Iran Action Plan.

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