Majlis Forex Options Still on Agenda

EghtesadOnline: Chairman of Majlis Economic Commission said on Tuesday a parliamentary measure to manage the foreign exchange market is still on the agenda, but lawmakers are giving the government more time to see whether its measures will prove effective.

News ID: ۷۸۲۶۹۸

26 May 2018

“Our proposal for stabilizing the forex market hasn’t been killed and from the standpoint of the economic commission members, it is still valid,” Mohammad Reza Pour-Ebrahimi told IBENA.

The government announced last month that it has unified the exchange rate for the US dollar in response to the sharp plunge in Iranian rial in the recent past.

It has assured the public that the US dollar for defined purposes, including imports, travel, students and research projects, will be offered by the government at the exchange rate of 42,000 rials, according to Financial Tribune.

Government measures came after lawmakers pressured it over the volatility, saying that unless the government came up with a clear plan to stabilize the market, they would lay out their own measures.

The government has stipulated, among other things, that travelers to foreign destinations can receive up to €500 or its equivalent in other currencies for the Commonwealth of Independent States and neighboring countries, and up to €1,000 for other countries.

According to the new rules, the possession of foreign exchange by individuals is allowed only up to a ceiling of €10,000 or its equivalent in other currencies and anyone possessing more than that amount should either deposit it in a bank or sell it to the banking system.

The Cabinet has also ruled that all exporters are required to return their export earnings to the country’s “economic cycle” either by selling them to or depositing them in banks or reusing it for imports.

The lawmaker added that Majlis has called for the establishment of a formal foreign exchange market, but the government believes conditions are not yet prepared.

Pour-Ebrahimi noted that if Majlis does not in the end reach understanding with the government, it will push for its own double urgency motion.

The government’s forex decisions have also come under fire by the private sector, with the business community complaining over the lack of an open forex market where unofficial trade has been driven underground.