Iran to allocate 32% of petrodollars to currency-reserve fund

Business Materials 17 February 2018 17:07 (UTC +04:00)

Baku, Azerbaijan, Feb. 17‎

By Gazenfer Hamidov – Trend:

Iranian Central Bank was obliged to allocate 32 percent of the country's oil and gas revenues to the country’s currency-reserve fund in next fiscal year(to start March 2018).

Iranian parliament which is studying details of the next fiscal year's budget bill approved that 32 percent of revenues from oil, condensate and natural gas exports(after subtracting the value of imported gas) to be transferred to the National Development Fund (NDF), the oil ministry’s official website reported Feb. 17.

The assets should be allocated to the fund in a monthly basis.

The NDF is Iran's sovereign wealth fund. It was founded in 2011 to replace the Oil Stabilization Fund. Based on Article 84 of the Fifth Five-year Socio-Economic Development Plan (2011-2015), the National Development Fund was established to transform oil and gas revenues to productive investment for future generations.

Some 23 percent of the revenues from the mentioned sources went into the NDF in 2013. This share was planned to reach 32 percent by the end of 2016, however the government was forced to keep it at 20 percent due to sharp fall in oil revenues.

Crude oil, gas condensate and net gas export revenues made 30 percent of the Fund during the first year of the 6th Development Plan, which started March 2017.

Also, according to the law, in the years 2 to 5 of the 6th Development Plan, the petrodollar share in the National Development Fund will rise by a minimum of 2 percent each year.

The NDF's reserves were around $54 billion when President Hassan Rouhani took the office in August 2013.

About 1.5 year ago, the Iranian officials announced that the fund’s reserves stands at $80 billion.