Producers, exporters, and importers met with governor of the Central Bank of Iran, Mohammad Reza Farzin.
During the meeting, business owners expressed disappointment with the excessive fees bank-affiliated exchange shops charge. The CBI has said that charging fees over and above approved by the regulator is against regulations and pledged to take action, IBENA reported.
Producers demanded that they receive an invoice for the fees they pay to moneychangers so that they can incorporate it into the total manufacturing cost, apparently for taxation needs.
Some importing companies highlighted the bloated bureaucracy and hassles in designating the intermediary bank during order registration and called for the designation at the time of submitting the payment receipt. The CBI stated that that would be the function of the Ministry of Industry, Mine, and Trade when making orders.
The concerns were focused on the complexity of the currency allocation process and the need for meaningful dialogue between relevant parties to address the mounting challenges businesses face.
Another issue that was raised was related to the time limits on currency allocation and the amount importers must deposit with the intermediary banks. Business owners demanded extension of the time limitations and said the policy of parking money as deposit should end.
Based on the new guidelines, importers hardly have one month from the time of currency allocation to receive the money. If the time expires the allocated credit is invalid. Importers claim that banks, both commercial and non-commercial, do not provide the necessary forex during the set timeframe forcing them to redo the bureaucratic process.
Importers must keep 5% of the total order value with the intermediary bank, and if the allocation is canceled due to exceeding the one-month period the next step requires them to put up 10% with further increases at subsequent levels. This practice has created new challenges for the already cash-strapped manufacturing units.
In this regard, the CBI boss said to expedite the currency procurement process, the central bank will directly purchase foreign exchange from exporters, eliminate intermediaries, and sell it to importers at a fixed rate to reduce costs and shorten the time required for currency allocations.
Farzin addressed calls by producers to reconsider the burdensome task of keeping funds with banks for import needs. "Our intention in implementing this measure was to reduce unsubstantiated overseas orders and cut the forex queues for genuine producers and importers."
"However, we are open to rethinking and committed to find workable solutions to eliminate currency constraints for producers and importers. As such, we welcome suggestions and proposals without discriminating between government and non-government entities."
The CBI has started buying and selling currencies directly, to help accelerate the process of currency allocation, he noted.
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."
‘Focal Point’
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.
The meeting concluded without palpable decisions and concerns raised by the businesses will be examined again by the relevant authorities.
