Documents obtained from a hack into servers of Iran’s president office revealed that €3.6 billion worth of oil revenues remained in banks and not entered the government’s systems.
According to a confidential report by the Islamic Republic’s Intelligence Ministry, leaked by the hacktivist group ‘Uprising till Overthrow,’ banks kept currencies they received from government entities exporting oil and did not transfer them to the country’s special currency scheme known as NIMA.
NIMA is set up for foreign currencies to be sold at a lower rate by exporters and for importers to buy what they need at the same low rate to finance their purchases from other countries. However, only traders with connections to the regime can use the system to their advantage, and ordinary businesspeople would not be allowed to use such benefits. The official rate at NIMA is at least 40 percent lower than in the foreign currency free market.
The document released after the hack is a list of oil revenues in deposit account balances of 11 Iranian banks for about a six-month time span ending on May 9, 2023. The total balance with the banks stood at the equivalent of €3.27 to €3.6 billion in the period.
The document also provided some sort of analysis for the reasons behind the issue and proposals to solve it. According to the ministry, the main reason the banks refrained from injecting the foreign currency into the NIMA system is its low exchange rate, which is way below the open market. It added that the regulatory bodies are not able to push the banks to sell the foreign currencies according to a timetable that suits the government and not the banks, which do not seem to be in a hurry to exchange the currencies in the NIMA system.
A point that is buried in the document is that the major portion of the money earned from oil exports are in Chinese Yuan because Chinese firms – particularly Chinese teapot refineries – are currently the main importers of Iran’s crude. And Yuan cannot be sold in the Iranian currency market like hard currencies such as the dollar and the euro.
Dalga Khatinoglu, an expert in Iran oil and energy issues, told Iran International that the foreign currencies offered in NIMA are mainly in Chinese Yuan, followed by smaller amounts in United Arab Emirates’ dirham, Kuwait’s dinar, Turkish lira and Russian ruble.
The analyst believes that the money has remained in the banks and cannot be used by the government because yuan does not have a lot of buyers in the market and the banks prefer to keep the funds in yuan instead of exchanging them with the national currency which has been losing most of its value.
The Iranian currency has been on a freefall since early 2018, when it became apparent that then-president Donald Trump would withdraw the US from the 2015 nuclear deal, the Joint Comprehensive Plan of Action (JCPOA), and impose sanctions on Iran. Under ‘maximum pressure’ Washington threatens to sanction third parties buying Iranian oil or dealing with its financial sector, which has deprived Tehran of foreign-currency revenues.
The leaked document did not explicitly mention the oil exporters but in recent years the government tends to issue permits for state organizations and the Revolutionary Guard to get oil from the country’s refineries and export it however they can. Then they can use the revenues to boost their budgets.
According to the document, the process of selling oil and extracting the revenues is very murky and the government, particularly the Central Bank of Iran, should devise plans to make the transactions clearer. The Central Bank should have tighter control over the amount of exported oil and the revenues from it and identify the exporters who refuse to sell the foreign currencies they earn in the NIMA system, the leaked document said.
The hacktivist group ‘Uprising till Overthrow’ claimed on May 29 that it breached 120 servers at the presidential office, getting access to internal communications, meetings minutes, President Ebrahims Raisi’s online conference platforms and about 1,300 computers inside the office.
In the new cyberattack, the group is said to have gained access to “tens of thousands confidential documents” but is releasing them in daily batches.
Earlier in May, the group, affiliated with the Albania-based opposition Mojahedin-e-Khalq (MEK) group — People’s Mojahedin Organization of Iran, hacked into the Islamic Republic’s foreign ministry servers, disabling 210 sites and online services and leaking another large batch of documents.
Courtesy: Iran International