Economy, Business And Markets

Tighter Supervision Over Bureaux de Change

Tighter Supervision Over Bureaux de ChangeTighter Supervision Over Bureaux de Change

In line with efforts that started last year to organize the foreign exchange market, the Central Bank of Iran has shut down 13 uncertified bureaux de change and intends to take firm action against those who  violate regulations or operate outside their business framework, a senior official with the bank said.

Speaking on state TV late Thursday, Samad Karimi, CBI’s export manager said “The list of registered money exchange shops is available on the CBI website” and warned the public to avoid business with unlicensed operators.

Outlining CBI’s plans for organizing the forex market, he said “The regulator has identified uncertified operators. However, we will deal with them in coordination with the law and the timing will be of our choosing.”

In the next stage, the CBI intends to deal with violations by certified money changers who do not comply with regulations or trade in currencies outside their companies, Karimi said.

He hoped the measures would mitigate the adverse impact of speculators and parallel market currency dealers on forex fluctuations and restore a “semblance of stability” to the market.

Foreign exchange rates are expected to stabilize as the lifting of sanctions last weekend enables the CBI  to increase the supply of foreign exchange to the market, Karimi said, adding that resumption of ties with foreign banks will significantly lower financial transaction costs, facilitate L/Cs and issuance of letters of guarantee.”

He hoped that the gradual post-sanction developments in the foreign exchange market will improve the speed and efficiency of the central bank in “funding commercial ventures and shift demand from certified forex operators to commercial banks” and thus lessen the pressure on the parallel forex market.

Uncertified bureaux de change which are often blamed by the government for instability in the  currency market are part of the crowded field of troublesome credit and financial institutions that grew  like wild mushroom during the controversial tenure of former president Mahmoud Ahmadinejad.