Five banks will start selling dollars and euros without the need for buyers to register with the Iran Central Exchange website, the Central Bank of Iran announced on Thursday.
Selected branches of Bank Melli, Bank Mellat, Tejarat Bank, Bank Sepah and Bank Saderat will start selling foreign currency up to €5,000 at rates announced on the ICE website.
Per law, every Iranian could buy $2,000 or equivalent every year at slightly lower rates compared to the unofficial market by presenting their ID card. That policy led to long lines of buyers of the cheaper currency and sell it in the open market at higher prices to make an extra buck.
Elaborating on the latest measure, the CBI head said Wednesday that people can now “buy as much foreign currency as they want without the need to register at the ICE.”
The CBI rate for Thursday under the banner of “latest rates at exchange shops" was 416,000 rials to the dollar, the euro was priced at 455,440 rials. The ICE apparently stopped announcing the so-called 'negotiated rate' on its website on Tuesday.
On the same day the CBI said licensed forex shops can buy/sell foreign currency based on the cash (unofficial market) price posted on ICE website.
The announcement came after the new CBI boss Mohammad Reza Farzin's tweet. "The Central Bank of Iran and exchange shops have started a joint action plan to help restore stability to the country's economy," he tweeted.
As the new trendsetter the "CBI will enter the free currency market and set rates," he said in the rare announcement.
In a reply to a Twitter user Farzin said that the plan is aimed to try and end the rent-seeking created due to the difference in the official and black market currency rates.
Forex rates declined in Tehran's free market after the Central Bank of Iran announced new measures to intervene further to control the highly volatile market. The rates at ICE were surprisingly higher than in the free market after the implementation of the new measures.
According to Eghtesadnews, the US dollar traded at 415,000 rials on Thursday down 0.61% on the previous day's close. Currency rates have scaled to historic highs over the past several weeks as the rial tanks and people hunt for safe havens to protect what is left of their hard-earned savings.
On Tuesday the greenback lost 1.6% or 6,790 rials in the free market to buy 425,210 rials. Melli Exchange and other bank-affiliated moneychangers tagged the dollar at 419,150 rials on Thursday, down 1.19%.
The euro slipped 1.95% on Wednesday and was traded at 453,590 rials. It was down 0.89% on Monday at 469,840. The exchange bureau sold the European single currency for 431,490 rials, up 0.08% from the previous day. The UAE dirham lost 2.18% on Tuesday and was worth 118,810 rials in the unofficial market.
On Monday the CBI raised the celling for currency that can be bought by the people once in a year from €2,000 to €5,000 or equivalent in other currencies.
Recently the regulator ordered currency exchange bureaus to report their rates shown on their electronic boards also on a central e-platform accessible to the public. The reason for this it said is to help “improve transparency in the way moneychangers operate.”
ICE, also known as the regulated market, is a network of certified exchange shops and banks dealing in wholesale currency under CBI auspices.
The senior banker told state TV earlier in the week that the CBI has plans to employ new ways and means for increasing its intervention in the unofficial forex market.
Elaborating on fresh moves to control the rates now at historic highs, he blamed unofficial social media channels for setting what he termed “misleading and incorrect rates” and disturbing the market.
"Market reality is different from what is portrayed in the social media…we have access to our resources in other countries and there is no issue regarding [forex] supply," he said, adding that the CBI will further increase its intervention in the currency market.
The CBI is reportedly planning to launch yet another market for gold and currency to address demand from individuals, investors and businesses, called "Nakhoda".
