CBI Governor Abdolnasser Hemmati had said earlier that the market would start work on the eve of the annual Muslim feast of Eid al-Adha (August 12).
But the regulator has decided to put off the date one more time apparently due to technical issues, Fars News Agency reported Monday.
The delay is said to be related to the CBI’s obligations vis-à-vis the company in charge of the new market and the minimum number of banks and exchange bureaus required to open the market, Financial Tribune reported.
The CBI initially linked the launch of the market to the participation of 120 exchange bureaus and seven banks, but the news agency said not more than 35 moneychangers and 2 banks have completed the registration process.
This is while more than 120 moneychangers had applied for and become members of the market up until last week. Most of them are said to be not eligible either because they have not met the formal requirements or did not participate in the pilot trade.
Rules for launching the first-ever forex market in Iran were approved in January by the Money and Credit Council – the main financial decision-maker headed by the CBI boss.
Stakeholders
Following the decision, a company comprising the main stakeholder was created in April to host trade in the regulated forex market. The main stakeholders of the company are the Association of Bureaux de Change Operators of Iran, Iran Fara Bourse (a junior stock market), Association of Private Banks, and the Association of Public Banks. The company launched its pilot trade soon afterwards.
The CBI has postponed the initiative several times due to the complexities pertaining to the launching of the market and concerns over the potential (negative) effects it may have on the fragile currency market.
Explaining the reasons why the latest mechanism was delayed several times, Hemmati had said the CBI wants “to do away with trial and error methods and ensure that everything is in its proper place” before the market starts work.
Likewise, the head of the regulated forex market company, Mahmoud Shekasteband, said the new mechanism is “waiting for the opportune time” to open in order to have the best possible impact on the foreign exchange market that has seen more than its fair share of heavy fluctuations over the past several years.
The much-publicized currency market seeks to create and organize an open and transparent system where foreign currency will be traded in cash via an electronic platform.