Iran denies bank governor to leave

Iran's central bank denied on Tuesday a report that the governor would leave his post, the latest dismissal of rumours that Ebrahim Sheibani could go as part of President Mahmoud Ahmadinejad's shake-up of top posts.

The president last week removed the oil minister, whose position was subject to months of frequently denied speculation before the change was announced on Aug. 12. The industry minister was changed at the same time.

"This is not true ... It's just rumours," Central Bank Deputy Governor Mohammad Javad Mojarrad told Reuters, when asked about the Fars News Agency report which said Sheibani would leave to become Iran's representative at the World Bank.

Some analysts said the move to replace the oil minister was taken by the president to exert greater control over the No. 2 OPEC crude producer's vital oil industry. They say other top officials, like the governor, could be in Ahmadinejad's sights.

"It is inevitable in my point of view (that the governor will change) because Mr Sheibani and Mr Ahmadinejad have had some disputes about interest rates and some other issues," said economic commentator Saeed Laylaz.

When Ahmadinejad called on banks to cut interest rates in May, a step implemented in June, his intervention was criticised by economists who said it would only push inflation higher.

Laylaz said that if such a change at the bank went ahead, it would be in line with what he said were the president's efforts to impose his politics on economic policy, particularly ahead of the March parliamentary election.

But such speculation has regularly been denied. As recently as Monday, the daily Donya-ye Eqtesad carried comments from a senior government official dismissing rumours about Sheibani.

International bankers, already wary of dealing with Iran after U.N. and U.S. sanctions were imposed on the country, are likely to be further unnerved if Sheibani is replaced.

They have said Sheibani has earned respect by seeking to keep politics out of monetary policy and also by fighting hard, with limited tools, to control prices. A change would raise questions about the government's aims, bankers have said.

Many foreign banks have already stopped dollar transactions and some have cut all dealings with Iran.

Fars said a possible choice for a future central bank governor was Tahmasb Mazaheri, managing director of Export Development Bank of Iran and an economy minister when former President Mohammad Khatami was in power.

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