Iran’s ex-Central Bank chief calls for resolving issues with the US

Former chief of Iran’s Central Bank, Abdolnaser Hemmati, told local media that one of the first tasks for the new president should be reaching an agreement with the West to lift sanctions.

In the first 100 days, “it is important to establish a policy of understanding with the United States and the three European powers to reduce sanctions and thus lower inflationary expectations. The government's first step should be to suppress these inflationary expectations,” Hemmati, a critic of Iran’s hardliners stated.

Nuclear negotiations by the Biden administration and Britain, France and Germany, which started in April 2021 failed to forge a new agreement to revive the Obama-era JCPOA nuclear deal. As a result, Trump administration’s oil export and international banking sanctions remained in place seriously impacting Iran’s weak economy.

Hemmati and numerous other experts and analysts in Tehran have long called for a change of course by the Islamic government, which has increasingly adopted a more hardline posture since 2020, not only in foreign policy but also in its repressive measures against social and political freedoms. Many hope that the election of the relatively moderate Masoud Pezeshkian can bring about a measure of change in both foreign and domestic policies.

The former chief banker is considered a ‘reformist’ who was a candidate in the 2021 presidential election when the hardliner candidate Ebrahim Raisi was elected amid heavy-handed engineering of the election process. He registered as a candidate again for the latest presidential elections but the notorious Guardian Council rejected his qualification.

“In the first 100 days, the government must demonstrate that it does not intend to continue the previous erroneous path,” Hemmati said. Although the new president, Masoud Pezeshkian has made many promises, he has offered few concrete plans for change. He has emphasized the need to improve relations with the international community, but when it comes to the United States, everyone believes the key is in Supreme Leader Ali Khamenei’s hand.

However, beyond improving ties with the West and lifting of sanctions, the government needs to open up the state-controlled economy to more market competition, Hemmati emphasized. “It is important to announce the main economic policy of distancing from a command economy and implementing primary policies based on competitive strategies to align and integrate the private sector with the state economy.”

Hemmati also highlighted his concern about Iran’s annual inflation rate hovering around 50 percent. The government must “correct wrong decisions to control the budget deficit and manage variables that lead to increased inflation."

With sanctions stifling oil revenues, the government has resorted to printing money to balance its budget, which has fueled runaway inflation in the past five years.

Calling for the president to be able to exercise his constitutional power, Hemmati said there is no need for a stronger or weaker president, but the constitution should be respected and applied in regards with presidential authority.