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News ID: 76317
Publish Date : 18 February 2020 - 22:16

Hemmati: Possible FATF Blacklisting a Non-Issue

TEHRAN (Press TV) -- Governor of the Central Bank of Iran Abdolnasser Hemmati said here Tuesday the Financial Action Task Force (FATF) is unlikely to put the Islamic Republic on its financial blacklist.
The Paris-based FATF is currently meeting with the participation of delegates from world countries, and Iran is expected to come up in its discussions.
Last October, the purported global finance watchdog gave Iran four months "for the sixth and last time” to ratify bills relating to the campaign against money laundering and funding terrorism.
Out of the four bills required by the FATF, Iran has already accepted two, but the other two bills have been stalled amid worries that they may expose the country to financial spying and new sanctions on Tehran.
To address the issue, Iran has adopted a set of internal regulations to fight money laundering and funding terrorism.
The government has been urging for the ratification of the remaining FATF bills, contending that without them, Iran may not be able to conduct financial transactions with its allies such as Russia and China.
The administration has also warned Iran’s currency might fall if the bills are not ratified. During recent days, the US dollar has jumped again reaching 143,000 rials, crossing the central bank’s "red line” of 140,000 rials.
Hemmati expressed confidence that the dollar would return to levels below the 140,000 red line.
"The recent exchange rate fluctuations are due to some trying to inflame the market under the pretext of the FATF meeting. This is while we have repeatedly stated that this issue will not affect the market,” he told reporters.
"Some say that the dollar has broken through the resistance level of 140,000 but it should be remembered that this level has been broken about three times in the last year but the central bank has managed to control the market and prices have balanced out,” he added.
Officials say speculators in the free market fuel rumors about the possible fallout from the FATF’s blacklisting of Iran to reap the windfall from dollar price movements.
The rial hit a historic bottom in 2018 amid a flurry of panic buying of the greenback in the country. Since then, it has recouped some of the losses.
According to U.S. news magazine Foreign Policy, social media networks played a key role in stoking fears of an economic downturn which prompted some families to convert their savings into dollars and euros after Iran came under intensified American sanctions.
Hemmati said Tuesday, "It is unlikely for Iran to be entered into the FATF blacklist. However, even if it is, this will not affect the exchange rate.”
"Whatever happens it should be borne in mind that our trade and foreign currency exchanges are conducted through non-sanctionable routes,” he said.
Because of unilateral U.S. sanctions, Iran is cut off from international payment networks, including SWIFT, making it impossible for the country to transfer money and carry out normal trade.
Hemmati said if the FATF blacklists Iran, "something bad that some people think will not happen.”
"Of course, I don’t think they will make the wrong decision to blacklist Iran.”
The FATF cannot impose sanctions, but individual states that are its members have used the group’s reports to take punitive measures against their adversaries. As a result, Iran has been targeted by US and European sanctions.
The Iranian currency, the rial, has lost value in the face of unilateral U.S. sanctions, disrupting Iran’s foreign trade and boosting annual inflation.
Hemmati said the inflation is now under check. "None of our forecasts for next year show inflation above 50 percent,” he said.
Hemmati also said the central bank was trying to rein in the liquidity growth which he put at around 25 percent over the past 50 years.
Iran’s liquidity grew by 3 percent this year against the 50-year average, mainly due to a rise in the country’s foreign exchange reserves, he added.