Mohammad Reza Farzin, the Governor of the Central Bank of Iran, said the CBI has started buying and selling currencies directly, to help accelerate the process of currency allocation.
In a meeting with exporters, importers, and producers Farzin said, "Foreign exchange rate is one of the fundamental issues for the economy…considerable part of the time and efforts of the bank and the government is focused restoring stability," the CBI website quoted him as saying.
He stressed that most of the currency is supplied by exporters, including petrochemical and steel companies.
However, he referred to certain issues causing delays in the currency supply process and expressed the Central Bank's new policy to directly buy currency from exporters without intermediaries. "This approach will reduce costs and shorten the time required for currency procurement."
On recent measures taken by the CBI he said, "Allocating currency from the government's reserves for essential goods and medicine was one of the first steps taken recently to restore stability and prevent steep jumps in exchange rates."
The Iran Center of Exchange (ICE) was created to facilitate uninterrupted supply of currency to exporters and importers.
"This center now is the focal point for currency policies and plans are underway to expand its scale and scope by launching futures trading, swap transactions, and utilizing other common tools. The ultimate goal is to provide the necessary currency to the public and businesses through this center."
The CBI in February 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.
Rates in the center are said to be reference rates for the market based on demand and supply of currency and gold, as well as key economic indicators.
Exporters Cautioned
Mohammad Reza Farzin, the CBI governor, this week warned exporters who have failed to return their forex earnings and said a special committee set up at the CBI is investigating the delays.
Farzin concurred that many exporters had repatriated their foreign revenue. "Last year, $65 billion was paid [for imports], which reflects the pattern of export revenue repatriation. Most of the forex came from the petrochemical and steel industries while other sectors also performed reasonably well. However, there have been breaches of [currency repatriation] agreements," IBENA quoted him as saying. He did not provide details.
Farzin earlier informed the Majlis about the CBI move to begin buying and selling foreign currency directly to eliminate backdoor deals. This move comes amid reports that some people and companies are involved in illegal forex deals.
"Although this is not widespread, there are reports of some individuals and companies dealing in currency through backdoor channels," the governor said in response to a question from a parliamentarian.
"The central bank wants to eliminate intermediaries and get a better grasp of the forex market developments and prevent abuse." He did not elaborate.
Last week the CBI stopped allocating forex to importers who buy currency from the free market before applying for foreign currency at cheaper prices.
"CBI policy is to curb the unofficial currency market…purchasing forex from the open [unofficial] market is no longer permissible for those who seek access to the CBI's cheaper currency resources…Dealing in and with unofficial markets is akin to money-laundering and harms the economy," Farzin said in a tweet.
It has been reported that some importers buy foreign currency from the CBI at lower prices only to sell it in the black market at higher rates.
Last month the CBI issued a warning about selling currency outside official channels and at prices higher than the authorized exchange rates. It said some exchange shops and exporters had ignored regulations and sold currency outside the official framework at exorbitant rates.
Law obliges petrochemical exporters to return at least 60% of their revenue through Nima, the platform where exporters sell their currency earnings to importers of non-essential goods, whereas non-petrochemical exporters must return 50% of their revenue.
Exporters are required to sell 20% of their income in cash to money changers. The balance can be used for importing goods either by the exporting firms or third parties.
