According to the Sedaye Sama news outlet, the Assistant to the Governor of the Central Bank for Foreign Exchange Affairs said that cash foreign exchange reserves had increased compared with December (Dey). However, when the period under review is extended from one year to two years, no significant change in cash reserves is observed, as the Central Bank replenishes its reserves after selling some of its banknotes in order to bring them back up to the required standard level.

Mehdi Darabi stated: “With regard to cash foreign exchange, we increased our banknote reserves compared with Dey. However, when you extend the period from one year to two years, there has been virtually no significant change in our cash reserves.”

He added that central banks around the world, including Iran’s Central Bank, maintain standard minimum levels of cash and foreign exchange transfer reserves. The Central Bank must also maintain a certain level of banknote reserves. It may previously have sold some of its banknotes and subsequently increased its reserves to restore them to the required standard. Therefore, when the review period is doubled, it becomes apparent that the banknote reserves have probably not changed significantly.

In a video interview, the Assistant to the Governor for Foreign Exchange Affairs emphasized that the Central Bank does not purchase exporters’ returned foreign exchange directly from street vendors or through the open market.

Some Iranian exporters receive payment for their exports in foreign currency banknotes, and their repatriation of export proceeds is therefore carried out in cash. For several months, the Central Bank had stopped purchasing some of the foreign currency banknotes brought in by exporters. Interestingly, many exporters had complained about the suspension of these purchases.

Darabi explained that the Central Bank no longer needed to purchase these banknotes because its reserves had reached the required standard level. At present, exporters bringing in foreign currency banknotes sell them directly to importers.

Source: ISNA News Agency, as cited in the original report.