F erdowsi Street in central Tehran is Iran’s busiest center for currency trading, both legal and under the counter. During one trading day alone millions of dollars worth of exchanges take place inside bureax de change, over the phone and online. The majority of consumers who use these independent exchanges are changing in the tens of thousands. However behind the scenes much larger deals go on through bank transfers using debit cards.
The street has historically been and continues to be the major place for trading especially with new developments like the Ferdowsi World Trade Center currently under construction there. When the new trade center opens, dozens of traders will likely enter the market and shake the street rankings.
The Financial Tribune asked a few of the beureax which foreign currencies are traded the most? The majority responded that their five most popular currencies were the US Dollar, Euro, the United Arab Emirates Dirham, British Pound Sterling and finally Turkish Lira in fifth place. In one of the beureax, we received a very different list which included US dollar, Euro, Canadian Dollar, UAE Dirham and then Australian dollar.
The beureax response was in contrast with international currency trading markets. Investopedia, an online resource for all things money related, released a report in October 2014 saying the most traded were in descending order, United States Dollar, Euro, Japanese Yen, British Pound Sterling and the Swiss Franc. There are obvious reasons for the difference in traded currencies. As expected, due to the US Dollar’s dominance across the world, this will remain in pole position for a while. The Euro is also a strong currency with many countries across Europe, including Germany using it daily. However, when it comes to the Japanese Yen, Iran and Iranians in general have no direct contact with Japanese traders and in recent years, the country has fallen of the radar within the country. Case in point would be the JAL airlines office on Villa Street, near Ferdowsi Street, which has been sitting idle since the mid 1990s with two inches of dust on its tables.
Next came Pound Sterling, due to its high value relative to the others. The pound is also an important currency benchmark for Iranians and acts as bellwether currency often due to its general strength compared to other currencies. Swiss Franc is the fifth most traded currency in international Forex markets, and unlike other markets, Iran does not follow suit for a number of reasons; firstly as the US Dollar is omnipresent in the daily trades. Other currencies often fall by the wayside. The Swiss Franc is one of these and if requested at one of the Ferdowsi beaureax you’d be hard pressed to find someone who stocked the currency.
As a result of the insurgent Chinese remnimbi, or yuan as it is more commonly known many traders of Ferdowsi often feel the need to stock the currency. Unlike the Japanese yen, Iranians do have an actual need to hold on to stocks of the Chinese currency due to trade deals between the currencies. Often Iranian businesspeople do have to carry the currency when on trade missions to China due to sanctions against the Iranian economy. Although it is gaining in popularity, the Chinese yuan is unlikely to knock any of the top four currencies in the next few years.
