In response to speculations that the scheme has been shelved by the Central Bank of Iran, Mahmoud Shekasteband said the groundwork is ready for launching the market.
“Launching the market is on the agenda of the government and the CBI, but it is the policymaker that should decide the timing,” he was quoted as saying by IRNA.
Little is known about the mechanism of the much-publicized regulated currency market, which is often touted as the government’s pivotal scheme to organize the often chaotic forex market, Financial Tribune reported.
The CBI, however, says it wants to create an open and transparent system where foreign currency will be traded on an electronic platform.
It has postponed the initiative several times due to the complexities involved in launching the market and concerns over the potential negative impact it may have on the vulnerable currency market.
The delay is said to be partly related to the CBI’s obligations regarding the minimum number of banks and exchange bureaus required to open the market.
According to earlier reports, the CBI has tied the market to the participation of 120 exchange bureaus and seven banks.
Shekasteband said the preliminary works for opening the market are underway by banks and moneychangers, adding that more than 130 exchange bureaus and banks are now connected to the market.
CBI governor Abdolnasser Hemmati said earlier that the he wants “to do away with trial and error methods and ensure that everything is in its proper place” before the market starts work.
Pilot Experiment
According to IRNA, the market started a pilot operation in late July and moneychangers trade currency in low volumes (below $1,000).
As part of the preparations, member moneychangers are provided with a simulated platform to make hypothetical trade.
Although no specified date is yet announced for opening the market, moneychangers have been asked to accelerate the final preparation process.
The market will deal in wholesale currency in cash and large volumes of forex will also be offered on a base price set by the regulator.
Retail forex trade will be the function of currency offices outside the regulated forex market.
The secondary forex market (known as locally as Nima) will remain in charge of trade in foreign currency hawala.