Economy, Business And Markets

Crucial Need for Currency Futures Market

Crucial Need for Currency Futures MarketCrucial Need for Currency Futures Market

The director of Bureau de Change Operators’ Association has called for setting up a futures market for currencies to both attract domestic and foreign investments and pull the market out of doldrums.

"Due to occasional fluctuations in foreign exchange rates, investment in the domestic market is not taking place or has been proved ineffective-- causing much harm to the market. Therefore, the launch of the currency futures secures a brighter future for the market, in that it is a precisely estimated and evaluated undertaking," Abdolamir Beit Lafteh was quoted as saying by Mehr News Agency on Sunday.

Highlighting the importance of lifting the economic sanctions against Iran and its impact on the economy, he said that the currency futures scheme -- by mitigating the high level of risk involved in domestic investment -- can provide psychological stimulus for raising long-term investment in industries, provided that the government and the Central Bank of Iran fully support the plan.

Naming the pertinent body that can or should launch the currency futures he said, "Iran Mercantile Exchange – with a strong precedent in bullion futures -- has proved its efficiency for the currency futures. It is, therefore, the most compatible organization for this scheme. However, it would still require regular CBI supervision."

Concerning the damages fluctuations in currency rates inflicted on the market in the past, he said, "The launch of currency futures will legalize currency deals and contracts in the framework of the mercantile exchange in a way that there is no room for corruption -- created by the not so steady foreign currency market (in the past)."

''Currency futures will alleviate commercial risks. Thus, it will welcomed by the public and private sectors, as these are the major players influenced largely by the volatility in forex rates."

The US dollar was sold at 34,620 rials on Monday, marking a slight growth of 0.03% or 20 rials yesterday’s close of 34,600. The official, subsidized greenback was of offer at 30,293 rials, continuing its upward trend.