Money Changers in Iran Get a Sense of Regulated Forex Market

EghtesadOnline: T he company overseeing the soon-to-be-launched regulated forex market held a meeting Wednesday to brief exchange bureaus on the role, functions and responsibilities of the new market.

News ID: ۷۴۷۵۵۰

15 June 2019

The meeting discussed Q&A about the role of Iran Fara Bourse (junior stock market in Tehran), membership fees, issues pertaining to shareholders, role of the Central Bank of Iran in the market…the CBI website reported.

Iran Fara Bourse along with the Association of Private Banks and Credit Institutions, Association of Bureaux de Change Operators, representatives from public banks are key stakeholders in the market.

The market will be launched with the participation of banks and certified exchange shops under CBI oversight, Financial Tribune reported.

It seeks to create and organize a transparent market where currency will be traded in cash via an electronic platform.

“The regulated market will function as an intermediary between money changers and forex buyers. Emotional behaviors have no place in the new market,” said the CEO of the company overseeing regulated forex market, Mahmood Shekasteband.

“The market was set up after the CBI decided to restore stability to the chaotic forex market. It is a place where real forex rates will be discovered,” he added.

The regulated forex market website is in pilot mode at www.ice.ir where daily forex rates are displayed.

Currency so far has been traded in a limited manner in money exchange shops and the so-called integrated forex deals system known as Nima, which is a platform for exporters and importers to buy and sell currency.

The regulated forex market is expected to start work later this month, according to an announcement by Mohammadreza Poorebrahimi, head of the Majlis Economic Commission.

It is said that the market will deal in wholesale currency in banknotes with exchange bureaus and banks.

In other words, retail forex trade will be the function of currency offices outside the regulated forex market.

Supply Management

A former banking official says discovering real forex rates in the regulated market demands efficient management of currency offers.

Kamal Seyyed Ali, a former CBI deputy for currency affairs, pointed to the role of banks and bank-affiliated exchange bureaus to achieve this.

Seyyed Ali said injecting enough forex into the market is one of the prerequisites for stability in the forex market.

“If sufficient forex is not secured by the CBI, and if proper supply management is absent, the market will encounter challenges,” IBENA quoted him as saying.

To be able to deepen the market, Seyed Ali said the CBI make more efforts to facilitate inflow of non-oil export earnings in cash to the country.

Due to the new US sanctions and blocking of banking channels for processing Iran’s transactions, many exporters have been struggling with immense difficulties repatriating money to the country.