Economy, Business And Markets

SEO Says Forex Bourse Feasible

SEO Says Forex Bourse FeasibleSEO Says Forex Bourse Feasible

A senior bourse official says launching the highly publicized currency futures would be possible after implementation of the unified foreign exchange rate.

“Lack of mechanisms to foresee foreign exchange rates is the main concern of foreign investors,”  Head of the Securities and Exchange Organization Mohammad Fetanat said referring to the visibly growing interest of foreign companies to invest in Iran following the signing in July of the Joint Comprehensive Plan of Action by Iran and the six world powers, IRNA reported on Wednesday.

“Appropriate measures have been taken to address this issue, eliminate the legal constraints to domestic production create the groundwork for setting up the currency bourse,” he said.    

The Central Bank of Iran, commercial banks, and bureaus de exchange could contribute to the successful functioning of the currency futures market, Fetanat noted.

On reports circulating in the media about merger of the bourses in the country, he said the SEO has no plan to do so. Pointing to Tehran Stock Exchange and Farabourse, as two well-established and prominent security markets in the country, the senior official said, “Farabourse is shifting its orientation towards sokuk, while it will also continue activities in the field of stock exchange.”

Sokuks are financial certificates like bonds that comply with Sharia or Islamic law and are emerging as a key economic paradigm in many Muslim and other countries.

Asked on the probability of establishing a bourse for real estate, Fetanat said, “Arrangements have been made at the Iran Mercantile Exchange to include real estate trading.” However, he noted that if and when the new body is created properties and holdings of banks and other sectors would have priority.  

Describing the interaction between the monetary market and the capital market as “favorable”, the SEO chief criticized high interest rates on deposits offered by unauthorized financial institutions, saying it has had an adverse effect on the financial market as a whole.

An increasing number of government officials and respected economic experts have been consistently warning about the destructive impact of unauthorized lenders that have cropped up in the country in recent years. Hardly does a week pass when senior officials from the central bank do not openly complain about the negative impact of such institutions and their weird practices.

However, little if anything has been down to close their doors or use the force of the law to stop their activities. More troubling is the fact that even the president and his men have seemingly been unable to confront the unlicensed bank-like organizations reportedly linked to or under the auspices of vested interests and influential economic lobbies.