EghtesadOnline: Plans are underway for eleven agent banks to sell foreign currency to non-commercial, everyday purposes as part of a new mechanism to reform the volatile currency market, says Mehdi Kasraei-Pour, head of CBI's Department for Forex Polices and Regulations.
Currency for non-commercial needs can be sold in two ways: cash or through the transfer ‘Hawala’ system, the Central Bank of Iran website quoted him as saying.
The number of cases which are payable in cash has increased in the new mechanism due to banks’ limitations in correspondent relations and the inability of exchange bureaux to handle money transfers through the Hawala, Financial Tribune quoted him as saying.
To increase feasibility and speed in payments, the necessary currency will be made available by the central bank to agent banks through revolving accounts, Kasraei-Pour noted.
He said if other cases of currency use, which have not been included within the framework of the bank’s currency regulations and directives, are reported to the bank, the bank will look into them and they can be recognized as eligible if the need is perceived as real.
In addition to receiving currency from the central bank, the agent banks have been authorized before to sell currency for non-commercial everyday purposes from their own resources within the framework and regulations they have received from the central bank.
On August 6, the CBI eased foreign exchange rules and allowed exchange shops to resume work at free market rates as part of its latest rescue package intended to calm the volatile market.
The policy was a complete reversal from the one adopted in April which regarded any currency trade outside the banking system as smuggling. The government also fixed the dollar rate at 42,000 rials at the time and said all currency demands would be met at that rate.
The CBI now allows the import of currency and gold into the country by all individuals to help stabilize the forex and gold markets, both of which have been particularly volatile for the past six months.