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Iran currency crisis: New head of central bank is named

Currency crisis has seen the rial lose more than half its value against the dollar in the past year
Bankruptcies at several unlicensed lenders have wiped out the savings of millions of depositors (Reuters)

Iran's cabinet has appointed a new central bank governor as the country grapples with a faltering economy and a sliding currency that have provoked public protests.

Valiollah Seif, who had served as the bank's governor since President Hassan Rouhani took power in August 2013, was replaced by Abdolnasser Hemmati following a cabinet meeting on Wednesday.

Rouhani has come under increasing pressure from hardliners to reshuffle his economic team, and senior government officials had suggested a shakeup was imminent.

"The situation today requires that a new force with fresh breath be brought in," Rouhani said, according to the Islamic Republic News Agency.

"I hope that by choosing appropriate tactics and methods, we can witness good developments on monetary, economic and banking issues."

The central bank has been criticised particularly over its handling of a currency crisis that has seen the rial lose more than half its value against the 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 bank to backtrack as the currency's street value crashed to record lows in June.

The crisis coincided with Washington's announcement in May that it was pulling out of the 2015 nuclear deal and reimposing full sanctions on Tehran, exacerbating the run on the rial.

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 Hezbollah.

Savings wiped out

Rouhani thanked Seif for his "strong and serious service", and said the cabinet had "full confidence" in Hemmati.

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.

Hemmati, 61, previously served as head of Central Insurance of IR Iran, as well as both Sina Bank and Bank Melli. He had already begun his diplomatic mission as ambassador to China before being recalled to take up the post of central bank governor.

Separately, Ali Tayebnia was appointed head of the Management and Planning Organisation of Iran, which drafts the country's annual budget, according to the Tasnim news agency.

Tayebnia served as minister of economic affairs and finance during Rouhani's first term.

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