The Central Bank of Iran said it has allowed all authorized moneychangers to buy the export income of mining and petrochemical companies, the secretary of the Iran Exchange Bureaus’ Association reported.
"The measure should help curb forex rates in the market and boost supply…Formerly, only bank-affiliated exchange shops could buy exporters' overseas income. The new measure is expected to help augment competition and gradually stabilize the market," IBENA quoted Kamran Soltanizadeh as saying.
The measure came after the association's request to the central bank. "We elaborated the reasons for the request, and its likely impact on the market rates, which was welcomed by the CBI."
Earlier the association had called for the resumption of currency trade at negotiated rates. "The market was [relatively] stable when the CBI allowed moneychangers to sell currency at negotiated rates. Prices rocketed after the CBI prohibited such deals."
According to Soltanizadeh "The market was indeed stable then…supplying the market via authorized exchange shops can help maintain some balance between forex demand and supply," Tasnim news agency quoted him as saying.
Last June the CBI allowed moneychangers to buy currency from exporters and retail and institutional currency holders at negotiated rates.
The move was welcomed by exporters because they could sell their currency at higher rates than the Nima platform, where rates are usually lower than the open market.
Nima is an online platform affiliated to the CBI through which exporters sell their overseas currency in the form of hawala. Companies buy the currency for importing goods, machinery, equipment and raw materials. In this system, importers declare their currency needs, exporters register their proceeds and banks and authorized moneychangers are brokers.
Currently exchange shops sell foreign currency using central bank resources and at rates set by the CBI," Soltanifar noted, adding that supplying the market with export revenue can and should help improve market stability.
Rates Down
Currency rates dropped in Tehran’s unofficial markets after months of record highs. The US dollar traded at 542,500 rials on Saturday in the open market.
The euro was unchanged and was quoted at 579,700 rials, the UAE dirham bought 151,000 rials and the GBP finished trade at 655,100 rials.
Currency rates jumped to historic highs over the past several months with the embattled rial in free fall. Hit by the rapidly deteriorating economic conditions people seek safe havens to protect what is left of their hard-earned savings.
The rial’s slight recovery comes after new power was delegated to the CBI and the establishment of a new trade center for currency and gold known as the Iran Center of Exchange (ICE).
The ‘Council for Coordination of the Three Branches of Government’ this week delegated more authority to the CBI to enable it prop up the rial and stabilize the chaotic forex market.
Heads of the three branches (executive, legislature and judiciary) stressed the need and significance of working in concord to help restore calm to the currency market struggling with skyrocketing rates unseen in the history of the country.
Economy Minister Ehsan Khandouzi said the CBI already has enough power over the work of exchange shops and banks. "The CBI wants extra clout to effectively intervene in the market," Khandouzi said, newswires reported Sunday.
"Listed companies' refusal to repatriate their export revenue was among the main concerns of the CBI. Henceforth all listed companies, including those owned by the government such as oil/ gas firms, are obliged to abide by central bank rules for repatriating export revenue."
The CBI last week unveiled the ICE apparently in the latest bid to control forex and gold prices. Mohammad Reza Farzin, the CBI governor, said, "Rates in this center will be the reference rates based on demand and supply of currency and gold, as well as key economic indicators."
"The aim is to set up a place where supply and demand interact at a reasonable price," Farzin said without elaboration.
Forex, however, is sold at lower prices at the ICE. According to EcoIran Web TV, the greenback was quoted at 448,160 rials on Saturday. The market started hosting euro and dirham trade on Tuesday. Each euro was sold at 476,640 rials, and the Emirati dirham at 119,310 rials.
The CBI on Saturday said $7.5 billion was supplied as cash to the market via the newly-created ICE in the past week.
Students and travelers accounted for the largest portion of the foreign currencies sold via ICE last week. Airlines purchased $3 million and sports federations took $800,000 last week.