The Central Bank of Iran Governor Mohammad Reza Farzin has expressed the hope that the new measures employed by the regulator would help control forex rates in the domestic market.
Farzin told the state-owned broadcaster that the CBI will address the real demand for foreign currency. "More than 600 licensed exchange shops and 50 branches of Bank Melli, Bank Mellat, Bank Saderat Iran, Bank Sepah and Tejarat Bank are selling foreign currency."
Last month the CBI said selected banks would sell foreign currency up to €5,000 to each Iranian a year at rates announced on the Iran Central Exchange (ICE) website.
Per law, so far every Iranian could buy $2,000 or equivalent a year at slightly lower rates compared to the unofficial market by presenting their ID. That policy led to long lines of buyers of the cheaper currency who then sold it in the open market at higher prices to make an extra buck.
Elaborating on the latest measure, the CBI head said earlier that people can now “buy as much foreign currency as they want without the need to register at the ICE.”
The senior banker concurred that "The current forex prices are high. Our existing and upcoming measures should help lower the rates in the free market."
Currency rates have jumped to historic highs in the past several weeks as the rial tanks and people seek safe havens to protect what is left of their hard-earned savings.
He blamed "price-gouging trends" for pushing up currency rates and urged the public to ignore them because they can buy currency at exchange shops and banks at lower prices.
"For example, today the announced rate for the US dollar was 433,890 rials, but it was being sold at 464,600 in the free (unofficial) market. Last week some traders were trying to increase the price of the UAE dirham in the market through fake deals."
The dollar traded at 456,700 rials Monday in Tehran's open market, down 0.54% on the previous day. On Sunday the greenback gained 1.3% to buy 459,200 rials. Melli Exchange and other bank-affiliated moneychangers tagged the dollar at 434,190 rials on Monday, unchanged on the previous day's close.
The euro slipped 0.73% and was traded at 487,830 rials. It was up 1.34% on Sunday at 491,140 rials. Exchange bureaus sold the European single currency for 458,780 rials, up 0.03% from the previous day.
The UAE dirham remained unchanged on Monday and was worth 127,300 rials in the unofficial market. It gained 1.64% on Sunday.
One More Market
Elaborating on CBI plans for launching a new currency and gold market, Farzin said, "The market was expected to be launched last week, but it was delayed because of some technical issues." He did not elaborate, but said the market would be unveiled next week.
"Once the market is launched, we will start offering Quarter Bahar Azadi gold coins in the market in line with plans to curb [rising] prices."
The CBI is planning to use the market for currency swap and derivative forex instruments. "The goal is to create a major and broad-based currency and gold trading center in the region," the CBI boss said, without explaining how and in collaboration with which countries such a center was in the making.
The central bank was officially allowed to launch ‘Iran Currency and Gold Trade Center’ last week, in line with the new governor's bid to try and control skyrocketing forex and gold prices.
The measure was proposed as an amendment to Iran Central Exchange operation rules and approved by the Money and Credit Council (MCC) last week. No details have been announced about the operating framework of the new market's operations.
ICE, also known as the regulated market, is a network of certified exchange shops and banks dealing in wholesale currency under CBI auspices.
