EghtesadOnline: With the aim to facilitate trade in the anticipated regulated foreign exchange market, the Central Bank of Iran raised the ceiling of planned daily forex trade fivefold.
According to a CBI notice, the maximum cash dealing will increase to € 50,000, or equivalent in other currencies, from the previously announced € 10,000, Financial Tribune reported.
“The move is to help facilitate foreign currency transactions conducted on the electronic platform among forex market brokerages,” the notice reads.
The long-awaited regulated forex market, which is touted as an important government measure to underpin discipline in the troubled currency market, has yet to be launched after several delays.
It is intended to deal in wholesale currency in cash. Trade will be processed by authorized exchange offices and agent banks that operate as brokerage within the regulated market. A self-regulated body affiliated to the CBI will oversee the deals.
The central bank has postponed the inauguration the market due to what it described as “complexities” involved in launching the market plus concerns over the potential negative impact it may have on the chaotic currency market.
Delays also have been ascribed to the failure to meet obligations of the CBI regarding the minimum number of banks and exchange bureaus to be involved.
As per CBI requirements, the market should open with the participation of 120 moneychangers and seven banks.
CBI Governor Abdolnasser Hemmati said earlier that the he wants “to do away with trial and error and ensure that everything is in its proper place” before the market opens.
Rules for launching the market (the first of its kind) in Iran were approved in January 2018 by the Money and Credit Council – the top financial decision-making body headed by the CBI boss.
In April, a company was officially registered to manage and supervise the market. 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).
At present, currency is traded in very limited numbers in currency 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.
Observers say if well planned, organized and implemented, the new market will challenge the very existence and role of unofficial currency dealers (black marketeers) in gauging currency rates.