TEHRAN, Jan. 7--Central Bank of Iran Governor Ebrahim Sheibani here on Friday declared that the inflation rate currently stands at 14.5 percent, expressing hope that the government would manage to keep the rate unchanged in the coming Iranian year which begins on March 20.
Speaking to ISNA, the CBI chief said that inflation would not worsen if the government withdrew money from Foreign Exchange Reserve Fund for importing goods.
"However, if the fund's deposits are converted to national currency, it would lead to a rise in the inflation rate," he said, stressing that withdrawing money from the fund for gasoline imports would not have an impact on inflation.
Sheibani said the CBI is studying the prospects of lowering bank profit rates, stressing that the move has to be approved by the Money and Credit Council.
He, however, said that the constitutional supervisory body, the Guardians Council, would certainly veto parliamentary initiative to cut bank rates as it runs contrary to the usury-free banking system.
"It is not possible to fix profits rates in a non-usury banking system," he said, adding that the banking system is not willing to give way to the initiative.
The parliamentary proposal has had mixed reactions among various economic and political circles with the conservatives welcoming a cut in bank profit rates as an obvious sign of greater social justice as promised by their fellow lawmakers in the parliament.
An economic expert said on Wednesday that the parliamentary plan is a very positive move and that it could help create greater competition in the industrial sector.
Farhad Hanifi told Fars news agency that high production costs have lowered the competitive power of Iran-made products on the global markets, stressing that the current high bank rates are responsible for financial shortages of industrialists.
"Without doubt, it is necessary to take any initiative that would help boost competition in the industrial sector," he said, stressing that Iranian businesses are faced with a huge financial burden.
On the other hand, many pro-reform economic experts have lashed out at the initiative as a short-term remedy.
The parliament is seeking to reduce bank profit rates by 4.5 percent within the next one and a half years. The banking system is against the initiative, citing adverse impacts such as a growth in liquidity and subsequent rise in inflation rate as the reason for its opposition.
The Central Bank of Iran advocates a gradual decline in bank profit rates. It reduced the rates by one percent last year.

TEHRAN, Jan. 7--The head of Investment and Technical Assistances Organization said here on Friday that favorable economic indices Iran has recorded in recent months have led to a decline in the country's investment risk.
Mohammad Khazaei told Fars news agency that reports that Iran's investment risk rate has gone up in the wake of political tensions are untrue, stressing that the country expects the Organization for Economic Cooperation and Development (OECD) to lower the rate from the current four to three or less.
"Political tensions in recent months have not impacted the investment risk rate in Iran," he said, adding that the officials have been trying to remove concerns that might strike the minds of foreign investors.
He, however, said stability in economic decisions is a must as far as absorbing foreign investments goes, adding that raising new questions about the two contracts, which was earlier finalized with Turkish companies, would create serious concerns among investors of other countries.
"There is the possibility of foreign investors thinking again before embarking on an investment project in Iran due to problems created for two major projects with Turkey," he said in reference to the two agreements to develop Imam Khomeini International Airport and Second Operator of cellular phone network with Turkey's TAV and TurkCell, respectively.
Khazaei said some foreign investors might ask themselves whether there is any guarantee that the same would not happen to their venture as well.

Controversies raised in the parliament over the multibillion euro contract with Renault for the production of Logan budget cars in Iran have been 'resolved to a great extent'.

TEHRAN, Jan. 7--A senior automotive industry official said here on Friday that the parliament's Research Center has not sought expert views of auto part makers in studying the L90 contract with France's giant carmaker Renault, stressing that the huge industrial project has taken on a political tone.
Mohammad Reza Najafi-Manesh, secretary of Auto Part Makers Association, told ISNA that it is not known why the parliament is reluctant to give the go-ahead to this project at a time when all those involved such as the Ministry of Industries and Mines, national carmakers and auto part industry are satisfied with the terms of the contract.
"We do not know who is going to suffer from sales of a budget car having high quality with 50 percent of the parts produced domestically," he said, adding that no one objects to signing CKD (complete knocked down) contracts whereas many lawmakers are against an agreement, which stipulates the manufacturing of cars with above 50 percent of the components produced domestically.
He said if the L90 project fails, no foreign country would be ready to cooperate with the national automotive industry and Iranian automakers would lose a golden opportunity to enter the international markets.
Najafi-Manesh's remarks come less than a month after the head of the Renault-Pars Company's board of directors said controversies raised in the parliament over the multibillion euro contract with Renault for the production of Logan budget cars in Iran have been 'resolved to a great extent' through negotiations with the lawmakers.
Boyouk Alimoradlou had told ISNA that a number of lawmakers were against the joint venture due to their specific outlook on industries and the strategies for the sector.
The company represents Renault as well as the giant Iranian carmakers Iran Khodro and Saipa.
All the agreements related to the giant project were finalized in October.
Renault and Iranian automobile manufacturers have agreed that the Iranian side would produce 50 percent of the Logan parts in the first phase of the project.
Experts believe that national automotive industry will not be revitalized until it has become globalized, hence the agreement will be an impetus for instilling greater competition to the domestic industry.
Capital investment in the L90 project will total 1.5 billion euros.
The price is estimated to be around 8,000 euros for full option models.
The Logan comes from L90 family of budget sedans.

TEHRAN, Jan. 7--Iran currently ranks 58th among 60 countries in global e-commerce, a university professor observed here Friday, adding that once banks get connected to international credit card systems, the status would improve.
A member of Isfahan University's faculty, Ali Sanaie, told ILNA that the next stage to promote electronic transactions is to embark on e-banking by joining the international credit card network.
Should credit cards enter domestic trade market, he stressed, Iran's ranking in global e-commerce would reach a single-digit figure.
"This (joining international credit card network) would not happen as long as Iran is not a party to World Trade Organization," Sanaie stated.
At present, e-commerce law was ratified and has come into the effect, he noted, adding that some private banks such as Parsian and Saman have card systems in the provinces of Tehran, Isfahan, Fars and Khorasan, which are different from the actual credit cards.
The university professor stated that one of the main advantages of e-commerce is that, if handled correctly, it can lower the cost of business by 20-30 percent.
The government has a plan to equip steel sector with e-commerce facilities to prove that cost of transactions could significantly be reduced, he announced.
Sanaie mentioned that Iran lags twenty years behind United States, European states and other developed countries in e-commerce.

TEHRAN, Jan. 7--The government has envisioned revenues of up to $15.2 billion from oil exports in the budget bill for next fiscal year which begins in March, a senior Management and Planning Organization (MPO) said here on Friday.
Mohammad Kordbacheh, deputy head of the MPO for macro-economic affairs noted that $4.1 billion of the total oil revenues will be deposited in Foreign Exchange Reserve Fund.
He told ILNA that the government would only have three billion dollars to spend during March 2005-2006. "The government's financial resources are limited to the three billion dollars the fourth development plan (2005-2010) has earmarked for its expenses next year," he said.
A senior Central Bank of Iran (CBI) official forecast earlier that Iran's oil revenues would total $28 billion in the year to March 2005, stressing that five billion dollars gained from the increase in oil prices would be deposited with the Foreign Exchange Reserve Fund.
Deputy CBI governor for foreign exchange affairs, Mohammad Jafar Mojarrad, stressed that the central bank is also expected to record a maximum three billion dollars of foreign exchange reserves by March.
Mojarrad said Iran has one of the lowest foreign liabilities among developing countries.
"Iran's debts run well below 10 percent of its gross national product of $135 billion," he said, adding that the country's de facto foreign debts currently stand at only $12 billion. The official said, however, that Iran's potential debts stand at $38 billion.

BEIRUT, Lebanon, Jan. 7--The new head of Lebanon's Council for Development and Reconstruction (CDR) Fadhl Shalaq here on Thursday expressed hope that the ground would be paved soon for broad involvement of Iranian firms in his country's infrastructure projects, IRNA said.
Shalaq was speaking in a meeting with Iran's Ambassador to Beirut Masoud Edrissi.
Welcoming the broadening of economic ties between Iran and Lebanon, as well as more extensive involvement of Iranian firms in infrastructure activities in his country, the Lebanese official said, "Industrial and technological advancement are among the major factors for development and prosperity."
Noting that CDR's main task is to advance infrastructure projects in the country, Shalaq reiterated, "We not only welcome the involvement of Iranian firms in such projects, but also consider it a necessity."
At the meeting, Ambassador Edrissi referred to the history of bilateral economic ties and said, "Necessary arrangements have already been made for Iranian firms' involvement in five infrastructure projects in your country."
Constructing the drinking water system in Lebanon's eastern city of Baalbak, establishing a treatment plant for Labwah City's sewage system in Lebanon's Boqa region, providing electricity for the southern parts of Lebanon, and asphalting the road between Nabatiyya and Majaiyyoun in the south are the projects proposed by the Iranian side and finalized with Lebanon's CDR.
Assuring the Lebanese official that the Iranian firms would complete the assigned infrastructure tasks in the shortest possible time and in accordance with the highest international standards, the envoy added, "Undertaking such major projects is proof of the Iranian nation's huge technical and engineering capabilities."
The budget for the above- mentioned projects in various parts of Lebanon is around $50 million.
Iran-Lebanon Economic Commission has held five consecutive meetings in recent years and a number of agreements have been inked between the two sides.

NEW DELHI, India, Jan. 7--Iran has suggested the establishment of an Asian bank for energy development for financing energy projects in Asia. It also said price of energy supplies from Asian producers to consumers in the region should be lower than that of other producers, reported IRNA.
"Asian countries, especially those with rapidly growing economies of the region like China and India, are in need of a long-term energy supply security. Oil producing countries, on the other hand, are concerned about the demand security. This is where an Asian interdependence may best serve the interests of all parties that are concerned about energy supply and demand," said Iranian Oil Minister Bijan Namdar Zanganeh here on Thursday.
"The establishment of financial institutions like an Asian bank of energy development can effectively back up energy projects," he added.
Iran supported India's call to establish an Asian oil market and an Asian benchmark crude (market) for oil sold in the region.

KUALA LUMPUR, Malaysia, Jan. 7--Chairman of Thailand Chamber of Commerce and Industries Ajva Taolanond here Thursday called for promotion of cooperation between Iranian and Thai private sectors to boost bilateral trade exchange, IRNA said.
An Iranian delegation made up of members of Iran's Chamber of Commerce will attend a meeting of chambers of commerce of member states of the Organization of the Islamic Conference, scheduled to be held in the Thai capital of Bangkok later this month to promote small and medium commerce.
Taolanond, in a meeting with Iran Ambassador to Bangkok Mohsen Pakaieen,
expressed hope the upcoming meeting with members of Iran's Chamber of Commerce would explore avenues for strengthening mutual cooperation.
He said Iran-Thailand commerce council will be set up in Bangkok.
The Iranian ambassador expressed satisfaction over the measures adopted by the two countries to set up commerce council and said it would be a step in materialization of the memorandum of understanding of the seventh meeting of Iran-Thailand joint commission.
Pakaieen stated that support for private sector is among priorities of Tehran government policies, adding the Iranian Embassy provides good facilities for Thai businessmen and facilitates the issuance of visas for businesspersons.

BIRJAND, South Khorasan,
Jan. 7--Deputy Agricultural Jihad Minister for animal husbandry affairs Kazem Tabatabaie said export permits for 1.4 million livestock have been issued.
He added most of these livestock are goats, which will be exported to Arab countries. The deputy minister said the country's red and white meat, dairy and other animal products in current year has exceeded 9.4 million tons showing a six percent increase compared to the figure for the previous year.
He said that the figure includes 1.2 million tons of poultry meat, 780,000 tons of red meat, 6.7 million tons of milk, 640,000 tons of eggs and around 30,000 tons of honey.
The official added that self-sufficiency has been achieved in milk, egg, poultry meat and honey.
"In the field of red meat, we have attained 97 percent self-sufficiency and we import only two or three percent of national demand for these products."

KABUL, Afghanistan, Jan. 7--Head of Afghan Chamber of Commerce Gol Ahmad Hooshmand said here on Thursday that the Iran-Afghan chamber of commerce will be established in Kabul in the near future in response to repeated requests from businessmen of the two countries.
In an exclusive interview with IRNA, he said the Islamic Republic of Iran and Afghanistan share numerous cultural, commercial and economic commonalties and given that the Afghan nation highly value Iranian-made products, a joint chamber of commerce would further strengthen such ties.
It is predicted that the joint chamber will accelerate business cooperation between the two countries, he said.
Afghanistan has established joint chambers of commerce with the US, Britain and Pakistan, he pointed out.
An Afghan delegation is due in Iran on January 14 to sign the relevant document, he said.