Russia, Iran to ditch dollar for ruble, rial

Russia said on Saturday that it is preparing to switch to national currencies in mutual trade with Iran. 

Russian Industry and Trade Minister Denis Manturov said the currency switch policy comes as trade between the two countries is expected to see a significant surge.

"Among other things, we do not rule out the possibility of settlements in rubles and rials, presuming that our trade volumes will be growing," Manturov has been quoted as saying in an interview with the local TV channel Rossiya 1.   

"Respectively, Iranian banks will acquire rubles that they will be able to use to pay for our products," he said.

Manturov had held negotiations on using the national currencies in bilateral trade during his visit to Tehran earlier this week, Interfax reported.

Last Tuesday, Valiollah Seif, the governor of the Central Bank of Iran (CBI), was quoted by the media as saying that Tehran has completed the preparations for establishing a joint bank account with Russia to facilitate trade between the two countries in their own currencies.

Seif had reportedly told a visiting Russian delegation that both Tehran and Moscow need to create a mechanism to connect their banking sectors, stressing that this is necessary for bolstering trade ties between the two countries.

The idea to set up a joint bank account between Iran and Russia to handle trade in rials and rubles was first revealed by Iran’s Ambassador to Moscow Mehdi Sanaei earlier this year.
Later, Assadollah Asgaroladi, a veteran Iranian merchant and the chairman of Iran-Russia Joint Chamber of Commerce, said the bank could break the domination of Western currencies over bilateral exchanges and that it would eventually open a new chapter in trade relations between Tehran and Moscow.

In March, Iran and Russia signed a basic agreement to create a joint regulatory body to oversee interbank financial transactions between the two countries.
The agreement - that was signed between the Iranian and Russian central banks – took both countries one step closer toward the establishment of the promised joint bank - which is believed to have been specifically designed to help dodge the effects of US-led sanctions on the two countries.

Russia, Iran to open joint bank for ruble-rial settlements

Tehran is waiting for a reply from the Russian Central Bank to a proposal on opening joint banks to make mutual payments in national currencies, Iranian Ambassador to Russia Mehdi Sanaei said.
"Iran is interested in stepping up economic and banking cooperation with Russia and in opening joint accounts and joint banks to make mutual payments in rubles and rials. I hope the Central Bank of Russia will take substantial steps in response to Iran's initiatives," Sanaei said on a LiveJournal blog.

Did Obama Just Make Iran's Brutal Dicatorship Stronger?

The term Koranic refers to one of Prophet Mohammed's successful raids on a Meccan caravan in the early days of Islam.

Rouhani claims the deal represents the greatest diplomatic victory in Islamic history. Leaving aside the hyperbole, a fixture of the mullah's rhetorical arsenal, Rouhani has reason to celebrate.

If not quite moribund, as some analysts claim, the Islamic Republic had been in a rough patch for several years.

For more than a year the Iranian Government was unable to pay for some of the 5.2 Million Public Secotr employees, most notably teachers, petrochemical workers, and students on bursaries. This led to numerous strikes.

Deprived of urgently needed investment, the IRanian oil industry was pushed to the edge with its biggest oil fields, notably Bibi Hakimeh and Maround, producing less than half their capacity.

Between the years of 2012 and 2015, Iran lost 25% of it's share in the global oil market.

Sanctions and a lack of investments also mean that large chunks of the Iranian industry, depending on imported parts, went under as well. In 2015 Iran lost on avrage 1,000 jobs a day.

Last month, the nations currency, the Iranian Rial, fell to an all time record low while negative economic growth was forecast for a third consecutive year.

Having increased the military budget by 21%, Rouhani was forced to delay presentation of his new budget for the Iranian New Year which began on March 21.

Against that background Obama rode to the rescue by pushing through a "deal" designed to ease pressure on Iran in exchange for nothing but a verbal promise from Tehran. Here is some of what Obama said.

• Dropped demands that Iran reshape its nuclear program to make sure it can never acquire a military dimension. As head of Iranian Atomic Energy Agency Ali Akbar Salehi has said: “Our nuclear project remains intact. The ‘deal’ does not prevent us from doing what we were doing.”
• He suspended a raft of sanctions and pressured the European Union and the United Nations to do the same.
• He injected a badly needed $1.7 billion into Iranian economy by releasing assets frozen under President Jimmy Carter and kept as possible compensation for Americans held hostage at different times. The cash enabled Rouhani to start paying some unpaid salaries in Iran while financing Hezbollah branches and helping the Assad regime in Syria.
• Obama released another tranche of $30 billion, enabling Rouhani to present his new budget with a reduced deficit at 14% while increasing the military-security budget yet again, by 4.2%.
• Banking sanctions were set aside to let Iran import 19,000 tons of American rice to meet shortages on the eve of Iranian New Year when consumption reaches its peak.
• Obama’s lovefest with the mullahs helped mollify the Khomeinist regime’s image as a sponsor of international terror and a diplomatic pariah.

What could possibly have been the rationale behind Obama's determination to help the mullahs out of the hole they had dug themselves into?

Some cite Obama's alleged belief that the US has been an "imperialist power", bullying weaker nations and must make amends. 

Others however say it's a suggested tactic to strengthen "moderates" within the Iranian regime who, if assured that the US does not seek regime change, might lead the nation towards a change of behavior.

Whatever the reason, what Obama has done could be best described as appeasement.

 In classical appeasement you promise an adversary not to oppose some of his moves, for example the annexaction of Czechoslovakia, but you do not offer him actual financial or dimplomatic support. Obama however has gone beyond that.

In addition to saving Iran from running out of money, on the diplomatic front he has endorsed Tehran's scenario for saving Syria.

Secretary of State John Kerry talked of Iran as "the regional power" to the chagrin of Washington's Middle East Allies.

Obama's imaginary "moderates" are not in good shape. The concil of Guardians that decides who could run for election next month has disqualified 99% of the so called "moderates" ensuring the emergence of a new Islamic parliament and assembly of expeerts dominated by radicals as never before.

 Meanwhile, the annual " End Of America" festival, yes that is a real thing, runs February 1 to 10 is held with greater gump than before.

With more resources at it's disposal Tehran is intensifying it's "exporing the revolution" campaign. Last week it announced the creation of a new Hezbollah branch in Turkey, and for the first time, made the existance of a branch in Iraq public. Tajikistan was also publicly added to the markets where the Khomeinist revolution should be expoted.

There are no "moderates" in Tehran, and the Islamic Republic cannot be reformed out of it's nature. For the remainder of Obama's term last, expect a more aggressive Islamic Republic.

So did the Mullahs deceive Obama? Nope, this was all Obama's idea.

The History Of The Iranian Rial 100,000 Banknote

Many of you who are just now getting interested in the Iranian Rial currency don't know all that much about it. In this post we'll educate you a bit on the history of the Iranian Rial 100,000 denomination note.

The chart below which is from Currency Liquidator shows the history of the Iranian Rial Currency. You can learn more about the note as well as the security features by visiting the page on their site here.

Iran must tread softly in making a return to international market

Greeks and Persians are friends again. On Friday, Hellenic Petroleum became the first European company to agree to buy Iranian oil since the lifting of sanctions, one of many businesses thirsting for opportunities in the country. 

The success or failure of such companies will be the hinge both for Iran’s domestic politics and the policy of engagement.

Iran was never entirely out of the market, even during the period of most intense sanctions from 2012 up to the start of this year. But a welter of restrictions imposed by the US, UN and EU restricted oil sales, financial transactions, insurance and shipping. Iranian oil exports, that tumbled from 2.5 million barrels per day (bpd) to a low of less than 1 million bpd, may now recover to more than 2 million bpd by the end of the year.

However, Iran faces a difficult external environment. Accounting for inflation, oil prices are at their lowest since 1999, and it is precisely the prospect of its higher exports that has led to the latest slump.
Even a partial realisation of Iran’s own plans will put further downwards pressure on other commodities, such as petrochemicals. Numerous half-completed projects litter the coast around Assaluyeh, terminus for South Pars, the world’s largest gasfield, shared with Qatar. Only some will attract investors and technology, but this will still mean a major boost in output, largely overlooked by forecasters.

The government has hopes for mining, with the world’s second-largest copper mine, and the largest reserves of zinc, as well as iron and other minerals. But prices for metals are almost as dismal as for oil, as Chinese growth has slowed down.

The Iranian president Hassan Rouhani’s government has to tread carefully. Politicians need to capitalise on post-sanctions euphoria, ahead of February’s elections for the parliament and the Assembly of Experts – where reformists face a kind of pre-emptive hard-line backlash.
It is impossible to show any tangible economic results in that short time, so the best the pragmatic-reformist camp can hope for is a surge in Keynes’ optimistic “animal spirits”, buoyed by some headline deal-making.

Most of the reported US$100 billion of frozen funds Iran will now be able to access has already been allocated to domestic projects, recapitalising its banks and to foreign bills. In any case, bringing it home all at once would fuel inflation and excessive strengthening of the rial.

From 1992 to 2009, a period including relative economic openness under the presidents Rafsanjani and Khatami, Iran attracted $34.6 billion of foreign direct investment in total across all sectors. Now the energy sector alone is said to require $500bn over the decade to 2025. Even allowing for some internal funding, this suggests some $12bn to $32bn of foreign investment per year, not to mention the vast requirements in transportation, telecommunications, hotels, health care, environmental protection and many other areas.

The country will therefore inevitably fall well short of its ambitious goals. Even partial success hangs on attracting foreign investment. This involves the usual steps of improving transparency, corporatising state companies, and passing investor-friendly legislation. True privatisation – not the murky, undervalued sales to insiders that typified the Ahmadinejad era – can help to rebuild a constituency within Iran that is not dependent on government largesse, and benefits from constructive relations with the rest of the world.

But such a transformation is vulnerable to the grip of Revolutionary Guards-linked entities on key parts of the economy, and the chance for hardliners to blow up minor incidents into international crises. Its Gulf neighbours are understandably concerned about Tehran’s regional influence, and its continuing support for Bashar Al Assad’s murderous regime in Syria.

The regional states, as well as the Americans and Europeans, have to sail a perilous path – confronting Iran politically where it threatens, while building mutual benefits through diplomatic compromises and trade.

What is the Exchange Rate for the Iranian Rial to the US Dollar?

What Is The Iranian Rials Exchange Rate?

The official exchange rate of the Iranian Rial to the US Dollar is 0.000033. What that means is that 1 Iranian Rial is worth 0.000033 of a single US Dollar.

With the Iranian Rial most buyers are probably used to hearing the rate quoted in price per million. At the offical exchange rate of 0.000033, a million Iranian Rials would cost a buyer $33.13.

With that said, the current going price by most currency brokers and dealers as well as on eBay and other sites is anywhere from $120 to $300 per million, quite a markup.

Now it goes without saying "exotic" currencies tend to have a higher markup. Some currencies like the Costa Rican Colone for example are very difficult to acquire and even on the wholesale markets can cost large companies upwards of 17% to buy even when buying in bulk. More common currencies like the Euro for example can often be had for about a tenth of a percent.

As you can see the Iranian Rial is being sold at quite a hefty markup. As with anything however, the market determines price and even eBay listings which start at 0.99 cents tend to wind up selling for about $100 or more so that shows us it's not just the currency brokers price gouging, the market is actually willing to pay that price.

It will be interesting to see what the future holds for the Iranian Rial. Will it explode in value, will it slowly go up in value? Will the country dramatically change and roll out a new currency? Only time will tell.

Currency exchange scandal by PayPal, Amazon and eBay With Millions in Iranian Rial Sales

Just stumbled upon this Youtube video from several months back. Recently, this past weekend the US lifted sanctions against Iran, making it legal to buy and sell Iranian Rial currency. A few months back however that wasn't the case. Here is a video which claims Paypal, Amazon and eBay violated sanctions. Is that true? Who knows. It would seem odd companies that big with attourneys and resources at their disposal as well as a strict selling platform it would seem odd they would allow this if it wasn't legal. Regardless, today,  it's clear US sanctions are lifted which occured this past weekend.