EghtesadOnline: Export companies sold $18.1 billion in foreign currency in the secondary foreign exchange market, known locally as Nima, in the eight months (March 21-Nov.20).
The amount was $10.7 billion in the corresponding period last fiscal year, the Central Bank of Iran reported.
Nima is a currency platform at which non-oil exporters sell their overseas forex income in hawala and companies buy for paying their import bills. The rate in this market is usually lower than the open market aka as the free market.
The CBI said the almost 70% rise in the currency traded via Nima indicates that the export “currency income repatriation is improving.”
It has been officially reported that forex offers have been of ascending order since the beginning of the fiscal year, rising from $1.4 billion in the month ending April 20 to $3 billion in the calendar month ending Nov.21.
The amount was 20% higher compared to the preceding month and the CBI said it hopes the uptrend will continue.
Currency sold at Nima is largely used for importing basic goods, raw material plus capital and intermediate goods by manufactures.
The historic decline in oil export due to the crippling US economic sanctions in the past three years hit government forex revenues hard and compelled it to encourage non-oil export and at times offer incentives.
Selling currency through Nima is one of the methods available to exporters to meet their financial commitments and return their overseas income.
A more popular way to meet export repatriation commitment, particularly for SMEs, is the “import in lieu for export” mechanism aka “currency barter between importers and exporters”.
This option was approved in October 2020 as part of the former government’s efforts to ease the cumbersome process involved in bringing back export income.
Exporters use part of their earnings to import goods, raw material and machinery either for their own needs or for a third party under the mechanism.
The Trade Promotion Organization has exempted small export companies to sell their forex proceeds at Nima, excluding giant export companies such petrochemical, steel and petroleum companies -- they sell a big portion of their forex at Nima while also having access to other repatriation channels.
Using one of the methods, exporters must bring back 90% of their foreign income and the 10% discount is allowed to offset the cost (fees) of returning the money home.
Stringent regulations for the return of forex income were enforced after the US imposed the economic blockade in 2018 to force Iran back to the nuclear negotiations Donald Trump had abandoned claiming the historic international agreement was the “worst deal in history.”
The TPO earlier said non-oil exporters had returned €63.4 billion (or equivalent) until September after the announcement of rules that made forex repatriation mandatory.