Set up with the aim of stabilizing the chaotic foreign exchange market, the regulated forex market is expected to start work by the last week of June, according to an announcement by the head of Majlis Economic Commission.
The regulated forex cmarket company was registered officially and launched its pilot trade in late April.
It is a private company comprising major stakeholders, namely the Association of Private Banks and Credit Institutions, Association of Bureaux de Change Operators, representatives from public banks, Iran Fara Bourse (over-the-counter market for securities and other financial instruments), Financial Tribune reported.
According to details released by IBENA website, affiliated to Central Bank of Iran, the market is designed to trade foreign exchange in cash (banknotes) in the first phase to be later extended to other trading methods.
In addition, in the initial stages the market will trade in two or three major currencies, including the USD, euro and the UAE dirham.
Trading begins at 10:00 am and ends at 4:00 pm.
It is said that transactions will be settled after the trading hours and won’t be carried forward to the next trading day.
The market will conduct wholesale trade in banknotes with money changers and banks. This means that retail trade will be the function of currency offices outside the regulated forex market.
As for pricing, the sale offers will be displayed on the trading bulletin in ascending order (from lowest to the highest) and the bids in descending orders. After that quoted prices will be matched and with the first deal the base price will be set.
Trades will be processed by authorized exchange offices and agent banks that operate as brokerage within the regulated market. The market will be managed by a self-regulated body created under CBI oversight.
The CBI has obliged exchange offices that operate in the market to open two accounts, one forex-based and the other rial-based.
A monitoring body within the regulated forex market will have access to the accounts and only allow transactions for which there is equivalent amount in their account. In other words, trade orders will be based on the balance in the said accounts.
Rules for launching the first-ever forex market in Iran were approved in January by the Money and Credit Council - a top financial decision-making body headed by the CBI chief.
Now currency trade takes place in a limited manner in currency 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.