$2.8b of Non-Oil Export Revenues Sold in Iran's Secondary Forex Market

Currency trade on the secondary forex market on October 3 was close to €46 million, Tasnim News Agency reported.

In addition, foreign currency allocated for imports during the 57-day period totaled €2.4 billion. This is while the amount on October 3 reached close to €57 million.

Euro's exchange rate on the secondary market on October 3 stood at 91,960 rials, Financial Tribune reported.

Downward Forex Trend 

In the forex related news, Seyyed Taqi Kabiri, a member of Majlis Economic Affairs Commission, said the downward trend in the forex and gold markets is likely to continue and the judiciary should crack down on banks and exchange shops which refuse to comply with the lower rates. 

Speaking to the Islamic Consultative Assembly News Agency, he said if banks and exchange bureaux cooperate, the dollar's exchange rate could fall below  80,000 rials. “When dollar rate is around 70,000-80,000 rials, the currency market will see relative stability.”

Blaming foreign exchange websites and social media networks for the unprecedented hikes in forex rates, the Tehran prosecutors' office and Cyber Police have clamped down on the purveyors of false information. 

According to the Persian-language newspaper Sharq, on Wednesday orders were issued to close 17 websites and 26 Telegram channels reporting currency and gold coin prices.  

Kabiri added that during the past months, many people chose to buy dollars and gold due to a variety of reasons as a result of which “a noticeable amount of currency and gold have piled up” in private hands.

He emphasized that by properly managing currency resources and consumption, the downward trend in forex and gold rates in the future is highly likely.

Former chairman of Tehran Chamber of Commerce, Industries, Mines and Agriculture Yahya Al-e Es'haq told Fars News Agency that if the CBI had intervened in the forex market two months earlier, there present state of chaotic affairs would be avoided. 

He said the staggering increase in forex rates was due to economic causes and were largely due to psychological factors. Strong oversight and intervention are a must in such conditions, he said. 

“In a country where a currency market with a size of 2-5% affects the livelihood of people including housing, food, trade, and everyday needs. It would be unwise to leave this market to its own devices and let it function based on supply and demand mechanisms. As such, government intervention is crucial,” he added.

He said besides the forex market, the issue of supply and demand, in the context of a competitive market, is effective only when the situation is normal. In uncompetitive conditions like monopoly and hoarding and in certain situations like economic warfare, and in situations where non-economic factors are the main players, supply and demand mechanisms do not make sense in controlling prices as well as forex rates. 

Decline in Smuggling

According to the deputy of Iran’s Headquarters for Combating Smuggling of Commodities and Foreign Currency, currency smuggling has decreased after limitations on the country’s macro policies were announced.  

Currency manipulators will be dealt with according to the law, Brigadier General Abdollah Hendiani told IBENA.

He said 400 cases of currency smuggling worth $250 million were recorded during the first three months of the current fiscal (March 21- June 21).

Hendiani said the increase in forex rates originates from the chaos in the market and with proper management the downward spiral is expected to continue.