The Central Bank of Iran said $2 billion was supplied to the market via the newly-created Iran Center of Exchange (ICE) in the first week of its operation.
From the total forex offered via the ICE $1.474 billion was purchased, IBENA reported. The CBI said the market hosted about $294 million in transactions each day, whereas the average daily supply was near $414 million. The regulator implied that supply was over and above demand.
The figures are seemingly twice the average trade in the Nima market, wherein nearly $200 million was offered daily but $150 million was bought, mostly for paying import bills.
Nima is an online platform affiliated to the CBI through which exporters sell their overseas income in the form of hawala and companies buy for importing goods, machinery, equipment and raw material.
The highest volume of daily trade and supply at the ICE was on Saturday when $576m was supplied and $423m was purchased.
The CBI last week unveiled the ICE apparently in the latest bid to control forex and gold prices that have jumped to levels unseen in the history of the country.
Mohammad Reza Farzin, the CBI governor, said, "Rates in this center will be the reference rates in the market 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.
"Once the market is launched fully we will offer Quarter Bahar Azadi gold coins to curb [rising gold] prices," Farzin said earlier. The CBI also has plans to use the center for currency swap and derivative forex instruments.
The idea to launch the center was initially floated as an amendment to Iran Central Exchange operations. Farzin referred to the CBI's recent measures to help address the “real need for foreign currency” of businesses and individuals.
The senior banker said the regulator will continue supplying importers of basic goods and medicine with cheaper currency at 280,000 rials to the US dollar.
Last May the government officially ended to the costly and controversial currency subsides ($1=42,000 rials), aka as preferential currency, which was given to selected importers of basic goods.
Soon after businesses said that with the end of the subsidy policy they would obviously need huge infusions of cash for importing raw material to bridge the gap between subsidized forex and open market rates. They urged the government to reconsider and compensate the liquidity crunch.
The central bank had announced earlier that plans are underway to expand the role of Nima in supplying the chaotic forex market. "Past policies had deficiencies that must be removed. A big part of forex is supplied via the Nima platform and our ultimate goal is to stabilize rates in this system at or near 285,000 rials to the dollar," Farzin was quoted as saying.
Currency rates have jumped to historic highs over the past several months as the rial tanks and people seek safe havens to protect what is left of their hard-earned savings.
According to local reports, the US dollar traded at 575,000 rials on Tuesday in Tehran's open market, down 3.88% on the previous day.
The euro lost 3.67% and was traded at 596,200 rials. The UAE dirham lost 3.89% to buy 155,800 rials in the unofficial market. The GBP was down 3.42% to finish trade at 679,700 rials.
Foreign currencies, however, are offered at lower prices in ICE. According to EcoIran Web TV, each US dollar was sold at 430,920 rials on Tuesday. The market also started hosting euro and dirham trade as of Tuesday. Each euro was reportedly sold at 458,900 rials, and dirham was priced at 118,000 rials.
The ‘Council for Coordination of the Three Branches of Power’ has decided to delegate more authority to the CBI to enable it prop up the rial and stabilize the chaotic forex market.
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.
