Iran Rial Report 2017

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Rial Collectible 2017 Report

The aim of the JCPOA (Joint comprehensive plan of action) is to significantly reduce the proliferation of Iran’s

enriched uranium in exchange for the easing of economic sanctions. Although a success, the US political rhetoric

has caused serious concerns, whether the incoming Trump administration will uphold the JCPOA. Before you

race towards an immediate conclusion, lets examine underlying issues that may change your thinking.

After 3 plus decades of sanctions, Iran continues to slowly emerge from isolation with a thirst to rejuvenate its

aged old infrastructure, technology, banking system, transportation, and military power. Not only are they

anticipating massive spending to rebuild their economy, Iran is consistently winning significant trade deals with

the developing world. Companies have also taken note, lining up to carve their share in the Iranian unprivileged

populous economy. Have you ever wondered, why countries and companies continue to demonstrate strong

interest in doing business with Iran? Trade, it’s the lifeline of an economy and Iran’s rich resources is ripe for the

picking, not to mention Iran’s growing appetite to import.

Iran Export Opportunities

The following export product groups represent the highest dollar value in Iranian global shipments during 2014.

Also shown is the percentage share each export category represents in terms of Iran’s overall exports.

1. Oil: US$50.7 billion (79% of total exports) 2. Plastics: $3.2 billion (5%) 3. Organic chemicals: $2.3 billion (3.6%) 4. Ores, slag, ash: $2.2 billion (3.4%) 5. Fruits, nuts: $1.3 billion (2.1%) 6. Iron and steel: $624.5 million (0.1%) 7. Salt, sulphur, stone, cement: $589.4 million (0.9%) 8. Inorganic chemicals: $454.1 million (0.7%) 9. Fertilizers: $448.7 million (0.7%) 10. Copper: $281.4 million (0.4%)

As you can see the country’s main resource, oil and gas, accounts for 79% of the country’s revenue in 2014 during

the most critical sanctions. Since the enactment of the JCPOA on January 16th, 2016, the easing of sanctions has

increased the demand for Iran’s exports in all groups represented above. Such economic activity will greatly

impact Iranian GDP (Gross Domestic Product - Revenue), employment rate, taxation, inflation rate and currency

appreciation.

Its Wednesday morning, November 9th, 2016, and the

world was awakened to the greatest political upset in

modern day history. Western media, political pundits, the

Clinton administration and their surrogates, sat in dismay

as the Trump campaign swept through the college electoral

board. The shocking defeat was felt around the world and

social media became the voice of the opposing disgruntle

American populous. While Clinton supporters angrily took

to the streets, world leaders cautiously embraced the new

president elect, Donald J Trump, reconciling foreign policy

differences and acknowledging common ground. It is no

surprise that the Trump administration has stirred up

major concerns around the JCPOA, led by the P5+1 (China,

Russia, United States, France, United Kingdom Plus

Germany) which make-up the five (5) permanent members

of the UN Security Council.

Iran Import Opportunities

Iran’s import opportunities are a very important topic, as it weighs in on our points around their significance in

trade for United States and other P5+1 countries. We previously discussed Iran’s aged old economy and the

desperate need to rebuild its infrastructure, technology, banking system, transportation, domestic products &

services, and military. However, the real question is, who becomes the beneficiaries of Iran’s imports? If you are

yet to figure it out, let me remind you of the JCPOA and the P5+ 1 countries. That’s right, United States and the

P5+1 countries are primary benefactors of the 80 plus million Iranian starved economy.

Benefits to P5+1 Countries

Increase GDP (Gross domestic profit)

Increase national tax

Reduce national deficit

Reduce unemployment rate

Reduce domestic company cost

United States and Iran

Since the election, we observed a change in tone from president elect, Donald J Trump on foreign policy matters

related to Iran. In fact, there has been no mention of the Islamic Republic of Iran, during the president elect’s

recent speeches. Previous President, Obama and his administration vowed to do anything possible to

strengthened its ties to Iran, with the cooperation of US companies, constitutional maneuvering, and foreign allies.

The following were measures taken by the past administration (Barack Obama) to further its commitment to the

Nuclear deal.

Shlumberger (Houston, Texas)

According to the Wall Street Journal on November 27th, 2016, Schlumberger Ltd, the world’s largest oil

driller by market value, said it had signed a preliminary deal to study an Iranian oil field, as Donald

Trump’s presidential victory has yet to deter U.S.-connected companies from dealing with Tehran.

Boeing (Chicago, Illinois)

According to CNN money, December 11th, 2016, Boeing announced they have finalized its agreement to sell

80 airplanes to Iran Air, despite staunch opposition from many lawmakers. The sale was made possible by

the Obama administration's lifting of economic sanctions on Iran in September. Shortly after the deal was

signed, the Treasury Department approved the delivery of Boeing (BA) and Airbus passenger planes to

Iran.

AT&T and Apple Corporation

As you may recall both AT&T and Apple recently launched in the Islamic republic of Iran with an aim to

capitalize on the Iranian market place.

ISA (Iran Sanctions Act)

Formally known as the ILSA (Iran Libya Sanctions Act), the act was enacted in 1996 by US congress to

impose economic sanctions on firms doing business with Iran. The ISA (Iran Sanctions Act) was up for

renewal in 2016, despite an abstained vote by president Obama, congress unanimous vote will serve to

extend the Act. However, the act has no bearing on the future success of the Nuclear agreement, but gives

negotiation power to the incoming Trump administration.

US loosens Financial sanctions on Iran

In October 2016, US treasury department released guidelines to ease financial sanctions on Iran through

regulatory measures, significantly bolstering Iran’s ability to access the global market and foreign

investment. The department also released guidelines to loosen restrictions on Iran’s ability to trade in US

dollars, according too the Wall Street Journal.

In the lkaldajladlakdadkajl Iran: U.S. Surrendered More Than

$10 Billion in Gold, Cash, Assets

January 9, 2017 5:00 am

The Obama administration has paid Iran more than $10 billion in gold, cash, and other assets since 2013, according to Iranian officials, who disclosed that the White House has been intentionally deflating the total amount paid to the Islamic Republic.

Senior Iranian officials late last week confirmed reports that the total amount of money paid to Iran over the past four years is in excess of $10 billion, a figure that runs counter to official estimates provided by the White House.

Obama Administration Seeks to

Secure Iran Deal Meeting of signatories to nuclear deal presents opportunity to shore up support for one of president’s key foreign-

policy legacies; Trump has called agreement ‘horrible’

Jan. 10, 2017 5:38 a.m. ET

BRUSSELS—U.S., European and Iranian

officials meet Tuesday in Vienna, a last

opportunity for the Obama administration to

bolster the Iranian nuclear agreement along

with its partners before President-

elect Donald Trump takes office.

The officials are meeting under the aegis of

the so-called Joint Commission, comprised

of representatives of Iran and the six world

powers who negotiated the July 2015 nuclear

deal. The commission oversees the

implementation of the accord and

arbitrates disputes among the

signatories.

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New Foreign Investments in Iran Despite Iran being a hot topic during the US elections, foreign investments continue to pour in, as the P5+1

Countries and investors positioned themselves for explosive growth.

Tourism

Giant French Company to Build 100 Hotels in Iran

Christophe Landais, the chief executive of

French multinational hotel operator Accor

Hotels Group, says the company is pursuing

a special mission in Iran and plans to

implement various projects around the

country within the next 10 years and perhaps

build 100 hotels during this time.

Luxury US Company Offering Iran Tours

One luxury tour company in the US is promoting a new trip to Iran, describing it as the first opportunity to see an Iran opening-up to the West after last year’s nuclear deal.

"This brings the total number of foreign institutional investors to 141," Mohseni said, Iran’s Securities and Exchange news agency (SENA) reported. The institutional investors, which received codes to trade in Iran’s capital market, are from Georgia, the UAE, Afghanistan, Indonesia, China, Oman, Germany and Sweden, he added. Mohseni also said that nine investors from the US, Switzerland, Azerbaijan, Poland, China, Iraq and Afghanistan (three people) received their trading codes in last calendar months.

Capital

Markets Iran Capital Market Attracts More Foreign Investors

The Central Securities Depository of Iran issued

14 new trading codes for foreign institutional

investors during the last Iranian calendar

month (ended Dec. 21), the CSDI head,

Mohammad Reza Mohseni, said

Iran attracts $7.2bn finance from 3 foreign banks

Deputy Governor of the Central Bank of Iran (CBI) for

Foreign Exchange Affairs noted, extensive negotiations with

foreign banks like Export-Import Bank of China (China

Eximbank), the Italian Mediobank as well as Danske Bank

of Denmark to attract $7.2Billion finance.

Why Iran Currency Will Appreciate

A currency will appreciate if there is increased demand for that currency on world markets, and its value in the

world market increases. This increase in demand can occur for several reasons:

When a country’s exports are high, the buyers of these exports need its currency to pay for those exports

When the country’s central bank increases interest rates

When employment and per capita income in a country increases, the demand for its goods and services

increases, along with demand for that country’s currency in the local market

Due to government borrowing or loosening of fiscal policy

When the demand of the currency is high in the foreign exchange market

Okay, now we have uncovered some underlying factors that will influence the appreciated value of any currency.

Let’s correlate these key points in our economic analysis of Iran.

Exports

According to OEC (Observatory of Ecocomic Complexity), In 2014, Iran exported$51B and imported $53.8B,

resulting in a negative trade balance of $2.78B. In 2014 the GDP of Iran was $425B and its GDP per capita was

$17.3k. However, since the enactment of the JCPOA in January 2016, Iran’s has more than tripled their oil

production, whilst increasing their non-commodities to 8.9%. With import increase to hit 50% of export

increases, Iran can expect to realize a net export.

Interest Rates

CBI Governor Valiollah Seif later announced that the central bank seeks single digit interest rates,

approximately 2-3% higher than the inflation rate. However, Iranian banks have no plans to further lower

interest rates until the end of the current fiscal year that ends on March 20.

Unemployment Rate

Iran’s unemployment rate currently sits at 11.29%, however, foreign investment and increase trade are factors

that are likely to decrease Iran’s unemployment rate. A reduction in Iran’s unemployment rate will increase the

demand for its national currency, boost internal spending and its’ circulation. That being said, when we

compare the United States unemployment data to Iran’s’, we can see Iran’s unemployment rate performing

significantly better per capita.

Fiscal Policy

Prior to the JCPOA, Iran lacked adequate fiscal buffers, in the form of liquid assets. When sanctions were

tightened in 2012/13, a lack of this fiscal space forced the Iranian government to cut spending, which worsened

the economic recession the country was experiencing. However, the recent easing of sanctions in 2016, proved

to be significant as it boosted investment and banks lowered deposit rate which impacted price/growth.

Currency Demand and Supply

Prices for exchange rates are determined on open market under the control of two forces, supply, and demand. During the pre-sanction era, restrictions prevented Iran from accessing the world financial market, plummeting any demand left for Iran’s currency. Such plunge in demand and loosened supply of circulated currency, among other key factors became disastrous for the Iranian rial prior to JCPOA. However, the easing of financial sanctions in September 2016, chartered a renewed course for the Iranian currency to gain momentum in the world market. Additional measures were undertaken to increase demand of their currency, which will appreciate in value, while tightening up their money supply.

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Creating Demand for Iranian Rial The gradual move towards increasing demand for Iran’s currency and the unification of the foreign exchange rates

has begun and its realization is already underway. Securing correspondent banking relations in an expeditious

manner was the first step in realizing a unification of exchange rates. To date, Iran has secured over 900

correspondent banking relations and counting. Below are evidentiary articles, chronicling the measures

taken to return confidence and pressure (demand) against the Iranian Rial currency in the world market.

26 Iranian Banks Now Connected to SWIFT

Baeidinejad has emphasized that 26 Iranian banks have so far been reconnected to SWIFT after the removal of the

economic sanctions against Iran in mid-January. They are all the foreign branches of key Iranian banks and include

the Yerevan branch of Bank Mellat, the Dushanbe branch of Tejarat Bank and the branches of Bank Melli

Iran in Baku and Baghdad. Iranian media quoted Hamid Baeidinejad, the director general for political and

international security affairs at Iran’s Foreign Ministry, as announcing that the banks can now handle a chain of

overseas financial transactions.

Melli Bank PLC joins TARGET2 system

TEHRAN– A Bank Melli Iran (BMI) official said Melli Bank PLC, a BMI subsidiary, has been connected to the real-

time gross settlement (RTGS) system for the Eurozone dubbed TARGET2. Gholamreza Panahi, Member of the

Board of Directors of Bank Melli Iran, said the connection enables speedy and final settlement of national and cross-

border payments in the Eurozone.

He underlined that Melli Bank PLC, a wholly owned UK subsidiary of Bank Melli Iran, was ready to offer brokerage

services to Iranian banks for euro payments in Europe.

Iran allows free foreign exchange at banks in move to unify rates

A statement on the central bank's website stated some banks were authorised to trade in foreign exchange at a "rate set by agreement between the bank and the customer" and that it would fulfil the banks' foreign exchange

requirements at the market rate. It said the directive aimed "to channel foreign exchange operations by individuals and entities to banks and decrease their risks".

Iran allows free foreign exchange at banks in move to unify rates

The Central Bank of Iran (CBI) says it has authorized banks to deal in foreign exchange trading at a free-market rate – a move which is expected to help control the rising rates of the dollar. It said the directive aimed "to channel

foreign exchange operations by individuals and entities to banks and decrease their risks".

Russia, Iran Working on Launching Currency Pair Trading Russian Central Bank

Moscow and Tehran are preparing for on trade in national currencies at the Moscow Exchange, according to Deputy Director of International Cooperation and Public Communications Department of the Russian Central Bank Andrey

Melnikov.

Iran Secures Correspondent Relations With 900 Banks

International sanctions hampered Iran's ability to connect with the global banking network, but the country now

has secured correspondent relations with 900 banks across the world, announced the minister of communications

and information technology.

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Iran attracts $7.2bn finance from 3 foreign banks

TEHRAN, Jan. 08 (MNA) – CBI deputy governor reported on attraction of financial resources worth 7.2 billion dollars through three international banks. “Measures taken by CBI in this regard include extensive negotiations with some foreign banks like Export-Import Bank of China (China Eximbank), the Italian Mediobank as well as Danske Bank of Denmark,” noted the official.

Iran Air takes delivery of its first of 100 Airbus aircraft

Iran Air has taken delivery of its first new aircraft, an A321, in a handover ceremony in Toulouse with Mr. Farhad Parvaresh, Iran Air Chairman and CEO, and Mr. Fabrice Bregier, President, Airbus Commercial Aircraft and Chief

Operating Officer Airbus, in the presence of Gael Meheust, SVP Sales and Marketing CFM, Tom Enders, Airbus Chief Executive Officer, and international media. The delivery is the first from a firm order placed by Iran Air in

December 2016 for 100 Airbus aircraft (46 single aisle and 54 wide-body jets) to renew and expand its fleet.

Top U.S. Senator: Trump administration won’t toss Iran deal

The chair of the U.S. Senate Foreign Relations Committee said that abrupt rejection of the Iran nuclear deal by the incoming Trump administration could create

"a crisis" and that he did not expect such an approach. "To tear it up on the front end, in my opinion, is not going to happen. Instead, we will begin to radically

enforce it," Senator Bob Corker told reporters on Friday at a breakfast sponsored by the Christian Science

Monitor. Corker advocated a wait-and-see approach. "In spite of all the flaws in the agreement, nothing bad is going to

happen relative to nuclear development in Iran over the next few years. It's just not," he said.

EU will stand by nuclear deal

EU foreign policy chief Federica Mogherini said that the EU will stand by the Iran nuclear accord. “It is proof that diplomacy works and delivers... The European Union will continue to work for the respect and implementation of this extremely important deal, most of all for our security,” AFP quoted Mogherini as telling reporters as she went into an EU foreign ministers meeting. The agreement “has delivered both on the nuclear-related commitments Iran took and on the firm determination of the international community to fully implement this deal”, she said. As far as the EU was concerned, the accord had resulted in increased trade and economic ties, “which is really significant”, she added.

British Foreign Minister Boris Johnson, who spoke to the press ahead of the EU ministers meeting, also

said the accord must be maintained.

Iran Open to Business Ties With US Foreign Minister Mohammad Javad Zarif said Tehran is open to economic relations with the US, despite differences

between the two sides. "China, Russia and India remain our important partners. They have been with us during difficult times. But we are interested in expanding our relations with the EU. We are interested in expanding our traditionally good relations with the rest of Asia, with Japan, with Korea," he said. Zarif made the statements at a panel in the World Economic Forum in Davos, Switzerland, on Wednesday, Tasnim News Agency reported.

"We are open to economic relations even with the United States. So, while we have our political differences with the United States, we are not closed to economic relations, as the deal we signed with Boeing indicates," he added.

As far as the EU was concerned, the accord had resulted in increased trade and economic ties, “which is significant”,

she added. British Foreign Minister Boris Johnson, who spoke to the press ahead of the EU ministers meeting, also

said the accord must be maintained.

CBI Enforces Decree on Usance L/Cs

The Central Bank of Iran has communicated to all banks and credit institutions the criteria for the implementation of a foreign exchange directive originally issued by First Vice President Es’haq Jahangiri regarding letters of credit.

The directive states that “for each case of imports, and outfitting of the assembly line of businesses, they are allowed to open a usance L/C worth a maximum $50 million for three years at the most [if the bank decrees that it is feasible investment],” as reported by the official news website of the central bank.

As to reasons behind the directive, the central bank first points to Iran’s nuclear accord and opportunities created by it in terms of establishing correspondent banking relations with foreign banks, which has subsequently helped open L/Cs for imports.

The CBI notes that the directive was issued since L/Cs are “the most prevalent and safest instruments in international banking for undertaking foreign purchase deals” and Iran also used them frequently before the sanctions.

In his directive, Jahangiri–who is also the head of Resistance Economy Headquarters–set out a series of f conditions regarding L/Cs, first of which is that applicants must obtain a license from the corresponding ministry for the import of goods.

140 Foreign Insurers Seeking Iran Entry

The Central Insurance of Iran, the industry’s regulator, has held talks with more than 140 foreign insurance and

reinsurance companies that sought to enter the Iranian market since the lifting of the sanctions in January 2016.

The report indicates that German, British, Swiss, French and Japanese insurance and reinsurance firms have been

among the most interested players to gain a foothold in the Iranian insurance sector post-sanctions.

A German insurer specialized in travel-health insurance, recently held talks with Iranian officials at the CII

headquarters in northern Tehran. Japan’s three leading insurers, Tokio Marine, Sompo and Mitsui, have offered

risk coverage of up to $200 million, according to the report. Senior officials from UK reinsurance firm, United

Insurance Brokers, also traveled to Tehran to study the Iranian market’s potentials.

Switzerland’s Echo Re is also named by CII as one of the major reinsurers interested in entering the Iranian market

in the post-sanctions era.

Iranian Entities Delisted From EU Sanctions

The European Union has eased sanctions against several Iranian entities, mostly in the energy sector, and one individual, EU said in a statement on Tuesday, a year after the nuclear deal between Tehran and the world powers came into effect.

The companies and individual delisted include the Oil Industry Pension Fund Investment Company, also known as OPIC, Petropars Operation & Management Company, Petropars Resources Engineering Ltd, Iran Liquefied Natural Gas Co., Moallem Insurance Company, Iran Aluminum Company (IRALCO), North Drilling Company, Good Luck Shipping Company LLC, Neka Novin (a.k.a. Niksa Nirou), West Sun Trade GMBH, Hanseatic Trade Trust & Shipping (HTTS) GmbH, and Naser Bateni, managing director of Hamburg-based HTTS.

The EU has also repealed restrictive measures against the London branch of Bank Saderat Iran, the statement showed.

As you can see, the world is embracing Iran as an emerging market and the stage is now set for the Iranian Rial to

gain fluidity in the world market. Let’s review more breakthrough events that will further drive pressure

(Demand) against the Iranian Rial in the world market.

Iranian authorities are taking steps to help local firms sell bonds abroad, which western fund managers are eager to buy. While there could be headwinds from the incoming US administration in Washington, Iran offers fertile ground for investors: The World Bank classifies the country of 77 million as an upper-middle income nation. Its $425 billion economy is expected to grow by 4.5% in 2016-18, it has diverse industries and a well-developed infrastructure.

Investors are eager but more than a year after international sanctions against Iran were removed in exchange for curbs on its nuclear program, compliance risks may remain, Reuters reported. "We would be very interested," said Lutz Roehmeyer, director at Landesbank Berlin Invest. "We have no exposure and that would be a great first step, but eventually we would actually like to be invested in local currency."

Iran's capital market regulator, the Securities and Exchange Organization, is encouraging local firms to explore alternatives to domestic lending, where rates remain above 20%. "There is a big project to help major listed companies or even the government itself to issue bonds in other countries, the first of which is [South] Korea," said Bahador Bijani, SEO's vice chairman for international and foreign investment affairs.

"Additionally, SEO is facilitating the process of listed companies issuing bonds in international markets like London. "Iranian international bond issuance has been virtually non-existent since the late 1970s, the time of the country's Islamic Revolution. Now, issuing abroad could help Iran alleviate another problem: A lack of expertise in syndicating foreign currency debt after being shut out of global capital markets for some two decades. Yet many western banks afraid of falling foul of remaining western sanctions may opt to stay on the sidelines.

"Last year, the SEO approved rules for credit rating agencies and granted its first license. The regulator remains open to more licenses, particularly for the big international rating agencies," said Bijani. The SEO official said the central bank and SEO are working on currency hedging tools to support cross-border deals.

"The stage is set, yet some authorities are more willing to employ the instrument in a unified exchange rate environment," he said. In December, Iran's central bank took steps to streamline exchange rates by allowing some lenders to deal in foreign exchange trading at a free-market rate, narrowing the gap with an official rate which is used for some state transactions. Updating regulations is also high on Tehran's list. In April, the SEO joined global watchdog IOSCO. Since September, the SEO has met with regulators from Switzerland, South Korea, India and Germany. And Iran's insurance watchdog, Bimeh Markazi, is set to hold talks with officials from Lloyd's of London later this year; the heads of both entities met in November.

What Currency?

Foreign debt deals would likely be denominated in euros, as this could provide a liquid and market-friendly instrument to bypass restrictions on US dollar transactions, said Jan Dehn, the head of research at Ashmore, a British investment firm with more than $50 billion under management.

"There is no doubt whatsoever that if there were not major legal issues or questions to do with sanctions and that big gray area around those current rules that could shift depending on the geopolitical tide, we would be investing in Iran already," he added. "While the international banking system is not yet fully open to Iran businesses, some are exploring alternatives," said Amir Kordvani, who heads the Iran desk and Middle East projects practice for law firm CMS Cameron McKenna LLP. Kordvani said companies are in talks with banks in Europe and elsewhere that have shown interest in considering facilitating payments subject to compliance rules.

"Other companies are looking at investment funds, especially for smaller projects. ECAs (export credit agencies) are another option. "Russia could also play a role as it explores the Chinese market to issue yuan-denominated bonds, providing a model for Iran to follow.

In addition, Iran and Russia are considering setting up an Islamic bank as part of efforts to expand economic cooperation, officials said in December.

Foreign Funding Sources to Open for Local Firms

A big project is underway to help major listed companies or even the government itself to

issue bonds in other countries, the first of which is South Korea

Bank Melli Iran Launches Int’l Money Transfer

Bank Melli Iran announced it can now transfer money overseas for individuals, as the bank expands its international ties in the post-sanctions era. “The customers are now able to transfer up to €2,000 per month,” said Gholamreza Panahi, director of BMI’s Department for Foreign Exchange.

“Earlier, Iranians had to visit exchangers to send money to foreign countries mostly for educational and medical purposes; now they can get similar services from BMI at a lower fee,” IRNA quoted Panahi as saying on Saturday. Even though sanctions against the Iranian banking system were lifted last January, Iranian banks have not been able to normalize relations with foreign lenders. There have been some improvements for businesses, as lenders’ performance shows they have issued many letters of credit in recent months.

However, ordinary people still encountered problems in undertaking cross-border money transactions.

Back in June, the Central Bank of Iran allowed banks to trade foreign exchange at the market rate. The bank has also invited the public, mostly businesses, to shift their foreign currency dealings from exchangers to banks, to regulate the market.

Earlier in October, Switzerland’s Reyl Bank announced that it is opening bank accounts for Iranian individuals and companies through its branches in Geneva and Dubai, allowing accountholders to transfer money.

Marked Shift

Mir Business Bank, BMI’s subsidiary in Russia, and BMI’s branch in Hamburg started offering services to businesses back in summer. However, the service was reportedly only offered to major businesses, including petrochemical exporters.

However, BMI's new announcement marks a shift toward offering such services to individual customers. This, according to the bank's forex deputy, has come about due to improvement in the bank's international services.

“We have fully established corresponding relations with about 25 foreign banks,” Panahi said.

“BMI’s branch in Germany and Melli Bank Plc located in London are now connected to Target 2,” he added, noting that other banks can use the services of the two overseas branches.

Target 2 is an interbank payment system for the real-time processing of cross-border transfers throughout the European Union.

Since the lifting of sanctions, Iranian banks have managed to resume operations in European capitals, including Persia International Bank, Eihbank and Bank Sepah branches in Germany and Italy.

The UK Treasury also removed the London-based subsidiary of Bank Saderat Iran, Bank Saderat PLC, from the blacklist of financial sanctions against Iran, in late November.

Panahi expects further improvement in Iranian banks’ relations with foreign banks, as “domestic lenders are working to address foreigners’ concerns about working with Iran”.

“Iran’s anti-money laundering initiative was passed a couple of years ago, and is being implemented by lenders. We need to familiarize our partners about such issues,” he said.

“Attracting foreign investment for the development of domestic projects is of higher importance for us.”

The official noted that the establishment of corresponding relations for Iranian lenders is now possible.

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2 Lenders Report Progress in International Ties

Iranian banks say they have had notable achievements on the international banking scene one year into the implementation of Iran’s nuclear accord with world powers.

Bank Sepah, according to its CEO Mohammad Kazem Choqazardi, has conducted “foreign exchange operations worth $4.4 billion during the year ending January 15 and has managed to resume the operation of its offshore branches in cities such as Frankfurt, Paris, Rome,” reports IBENA.

The executive says his bank has regained access to SWIFT —a secure network that enables financial

institutions worldwide to send and receive information about financial transactions— and through

which is working with 88 banks. The CEO of the state-owned lender added that it has opened 42

accounts with 23 international banks.

Iran, Turkey Central Banks Sign Cooperation Agreement

Central banks of Iran and Turkey on Wednesday signed an agreement to work on addressing current

banking issues between the two countries including integrating the two countries' payment networks

and using national currencies for bilateral trade.

The agreement was signed by Mohammad Yaqoubi, CBI's deputy for international affairs, and Mehmet Taskin, deputy executive director at Central Bank of Turkey, during the third meeting of Iran-Turkey banking committee in Tehran.

The committee is formed to remove banking obstacles to boosting the two countries’ trade volume. Iran and Turkey had agreed earlier to increase their trade to $30 billion by the end of 2017. The next meeting of the committee will be held at the presence of representatives from commercial banks of the two countries.

Back in April, Iranian and Turkish officials agreed to launch a joint banking committee with four state-owned and four private banks from each country as members.

Forex Rate Unification in 2 Months

Tt will take two months for the Central Bank of Iran to implement plans for unification of foreign

exchange rates, said Valiollah Seif, CBI’s governor. He noted that plans will start once the central bank

“feels it is the right time to do so,” banker.ir quoted him as saying. Central Bank of Iran and Ministry of

Economic Affairs and Finance had announced that forex rates will be unified by the end of the current

fiscal year (March 20, 2017) but currency market fluctuations seem to have delayed the process.

Seif noted that normalization of banking relations with foreign countries is the prerequisite for adopting

a single foreign exchange regime. He was optimistic about Iranian banks’ reintegration into

international banking network, considering “all the measures taken for promoting banks’ operations in

line with international standards.”

The inauguration is now over and Donald J Trump was successfully sworn in as the 45th President of United States of America. President Trump’s first 100 days continues to unravel with daily executive orders promising to fulfill his campaign commitments. Yet, what President Trump once considered his No.1 priority on his to-und0-list, the Iran nuclear agreement, seems to be more difficult to scrap than the self-declared dealmaker initially thought. It appears that both President Trump and Iran are reserving foreign policy comments about each other as the dust continues to settle. Fresh evidence of this reality arrived at the white house, when British Prime Minister Theresa May was the carrier of an important message: The Iran nuclear deal is here to stay! Previewing Prime Minister Theresa May’s trip to Washington, her spokesperson said that she will stress the British strong support for the 2015 Iran nuclear deal, concluded between Tehran and six world powers. Signs that there is no appetite for a new round of gruelling negotiations are not only coming from London, but also Paris, Berlin, Moscow, Beijing, Tehran and the other signatories of the agreement. We are not insinuating smooth sailing relations between the Trump administration and Iran. Rather, we are endeavouring to demonstrate the Trump administration willingness to be more calculative in their foreign policy directives around Iran. Whether it’s the key stone XL pipeline, TPP trade deal, NAFTA, regulatory burdens or immigration, the main objective is to design measures to preserve and or increase job opportunities for the American people. In saying that, there should be no surprise we are yet to witness a tossing of the Iranian deal. Let’s re-examine a few disadvantages the US will face, if the JCPOA is not upheld.

Conclusion

Disadvantages

Increased tension between Russia and

China

Breach of UN resolution

Geo-political tension with European &

Asian countries

Significant loss of job opportunities

Rise of Iranian hardliners

Iranians may increase the proliferation

of enriched uranium

Increase tensions in the middle-east

Development of nuclear weaponry

War

Let’s finally lay this point to rest. As you can see, tossing the Iranian deal aside is not a simple task and its unlikely to occur. In fact, we are witnessing, a more careful consideration and assessment on the upside potential, Iran nuclear agreement may provide. Not to mention the dark downside of not adhering to the JCPOA. As you may recall in our previous communications and current report, we discussed Iran’s aged old economy and their need to increase import. Such imports are not only beneficial to the Iranian economy; it will provide a significant boost to the P5+1 countries, which includes the United States.

It’s important to understand that Iran has incredible options with or without access to the US financial system. The Iranians have already established alternative measures through the Euro and Chinese financial system, providing access to settle financial transactions. With massive trade deals, MOU’s and the solidification of correspondent banks around the world, Iran is truly positioning itself as a super-power in the middle east.

Let’s quickly touch on the immigration executive order recently passed by President Trump. The order placed a 90 day ban on 7 Muslim majority populated countries including Iraq and Iran. I am certain you may have heard the chaos in the media. What surprised me the most, is the outpouring support Iran and many countries are receiving from various nations, fortune 500 companies and the people. Let’s not be mistaken, the world needs to curb global terrorism and divisive measure may not be the best solution. Nevertheless, its important to understand that although the ban will slightly increase tensions, it has NO bearing on Iran’s financial future and economic growth. Good things often arise as a result of unfortunate circumstances and this ban will undoubtedly open more doors for Iran and their currency. Whether it’s the Iraqi Dinar, Vietnamese Dong, Indian Rupee or Zimbabwe bank notes, Collectors around the world are inundated with various GCR/RV intel, political interpretations and often misrepresentation of facts. Although the Iranian Rial is said to be among the first basket of currencies to be RV (Revaluated) in the Global Currency Reset. The potential of the Iranian Rial reaches far beyond the RV/GCR. In fact, the Rial will independently increase in value with or without a RV/GCR and is not synonymous to the RV/GCR scrutiny.

Why? Let’s look at some facts surrounding the economic fundamentals of Iran. US sanctions, prohibiting the Iranians from accessing the world financial system among other factors, caused the Rial to significantly depreciate. Restricted access to the US financial system meant that demand from the world market plummeted, while the CBI (Central bank of Iran) steadily increased their currency supply. Now that the restrictions were lifted in September of 2016, we are now witnessing its positive effects. Unlike other collectible notes that trade on the global foreign exchange market, the Rial has not been as fortunate until now. The rise of the Rial is based on its own merits and supply and demand, plays a critical part in the upward/downward movement of the currency. Inflation at all time low, trade drastically increasing and new currency controls in place, the Rial is steadily emerging as a global player.

At the present, Iran has both an official exchange rate and an unofficial market rate that is used in exchange houses. To help boost the economic growth, Central Bank of Iran (CBI) Governor Valiollah Seif announced plans to unify the dual currency exchange rates before the end of the current Iranian calendar year (March 20, 2017). If realized, the move will be a major step toward effectively floating the Rial and ending state control over the foreign exchange market. This move will not only drive the international community’s confidence in Rial, it will significantly increase its demand and value.