ZCZC
BCN-13
IRAN-ECONOMY-POLITICS
Iran replaces central bank chief as economy faces crisis
TEHRAN, July 25, 2018 (BSS/AFP) – Iran replaced its central bank chief on
Wednesday, local media reported, amid fallout over banking scandals and the
crisis facing the country’s economy.
Valiollah Seif, who had served as the bank’s governor since President
Hassan Rouhani took power in August 2013, was replaced by Abdolnasser Hemati
following a cabinet meeting, according to the official IRNA news agency.
Hemati, 61, previously served as head of Central Insurance of Iran, as
well as both Sina Bank and Bank Melli. He had been slated to become
ambassador to China until he was recalled at the last minute.
Seif has been criticised particularly over his handling of a currency
crisis that has seen the rial lose more than half its value against the
dollar in the past year.
An attempt in April to enforce a fixed rate for the rial sparked a boom in
black market exchanges, forcing the central bank to backtrack as the
currency’s street value crashed to record lows in June.
The crisis coincided with Washington’s announcement in May that it was
pulling out of the 2015 nuclear deal and reimposing full sanctions on Tehran,
exacerbating the run on the rial.
The US also slapped individual sanctions on Seif in May, accusing him of
helping Iran’s Revolutionary Guard Corps transfer millions of dollars to
Lebanon’s Hezbollah.
Rouhani thanked Seif for his “strong and serious service”, and said the
cabinet had “full confidence” in Hemati.
He said a key priority was tackling “illegal credit institutions”.
Bankruptcies at several unlicensed lenders — which had offered high
interest rates and cheap loans with little capital to back them up — wiped
out the savings of millions of depositors and has been a key driver of recent
protests.
Rouhani vowed to crackdown on unlicenced banks when he came to power.
His government has been pressured to repay lost deposits, further
straining government resources.
BSS/AFP/MR/1334 hrs