Economy, Business And Markets

Police Will Not Intervene to Control Forex Market

Police Will Not Intervene  to Control Forex Market Police Will Not Intervene  to Control Forex Market

Unlike 2012, when the Iranian police force cracked down on illegal foreign exchange dealers in Tehran and other big cities, the police have this time no plan to intervene in the market unless top authorities order them to do so, Police Chief Brigadier General Esmail Ahmadi-Moghaddam said on Monday.

In 2012, the rial lost about 70 percent of its value due to macroeconomic mismanagement and intensification of economic sanctions imposed by the West on Iran over its nuclear energy program.

In recent months, the rial has lost further ground versus major foreign currencies. The general said senior banking officials already seek police assistance to restrain illegal dealings that add to exchange rate volatility.

The issue of illegal foreign exchange trade has long been troubling the domestic forex market. Taking a casual stroll through Tehran's Ferdowsi area, when foreign exchange dealers have authorized offices, one is sure to run into many individual dealers who regularly do business on every street corner. Although the independent dealers have commonly been blamed for disrupting the market, thus far, governments haven't been successful in ridding the market of illegal trade.  

Speaking on the sidelines of the first conference of police detectives, the police chief clarified that the Headquarters for Fighting Economic Corruption, set up in late 2013 by President Hassan Rouhani, has the matter under control and any measures that the police force take are assigned by the headquarters, ISNA reported.

The police commander noted that correcting illegal foreign exchange trade is a "highly sensitive matter."

When foreign exchange rates sky rocketed in 2012, the previous government called on the police force to take extreme strict measures against the unauthorized dealers, he explained.

Nonetheless, in light of the fact that the government itself was short on foreign exchange, the crackdown proved counterproductive and further raised foreign exchange rate volatility.

Past experience has it that crackdowns and radical measures are not the correct way to deal with economic problems, he said, adding that for now, the matter is being logically assessed at a steady pace and solutions have been put forth.