Iran sacks central bank chief, as rial's slide continues

Iran sacks central bank chief, as rial's slide continues
The outgoing central bank chief Valiollah Seif is widely viewed as mishandling a currency crisis that has seen the rial's value plunge by more than half.
2 min read
25 July, 2018
Iran replaced its central bank head on Wednesday [Getty]

Iran replaced its central bank head on Wednesday amid fallout from a year-long currency crisis that has seen the rial's value plunge, local media reported. 

Abdolnasser Hemati replaced Valiollah Seif, who had served as the bank's governor since President Hassan Rouhani took power in August 2013, the official IRNA news agency reported.

Hemati 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 over his handling of Iran's currency crisis, which has seen the rial lose more than half its value against the US 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 central bank's decision coincided with US President Donald Trump's announcement in May that Washington was pulling out of the 2015 nuclear deal and reimposing sanctions on Tehran. 

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 Hizballah.

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.

Protests swept Iran at the end of last year and resurfaced this month amid continued economic troubles.

Earlier this week, the rial's value dove again to a black market exchange rate of 92,000 to the US dollar after Trump wrote 
an explosive tweet in all-caps warning Rouhani that Iran "will suffer consequences the likes of which few throughout history have ever suffered before".

The comments came after Rouhani said that any conflict with the US would be the "mother of all wars".

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