Economy, Business And Markets

Banks’ Forex Operations Not to Affect Exchangers

Banks’ Forex Operations Not to Affect Exchangers Banks’ Forex Operations Not to Affect Exchangers

Money changers will not be affected by banks operating in the forex market, the head of Export Development Bank of Iran Brokerage firm said.

“Banks were trading foreign currencies even before the Central Bank of Iran gave them the permission to do so and since only a proportion of currency dealings [at the market rate] would take place in the banking system, that does not  interfere with the functioning of bureaus de change,” ILNA also quoted Reza Alavi as saying.

“Payment orders issued by currency exchangers are different from those offered by the banking sector,” he said.

The bank official, however, said levying a value-added tax on money changers’ operations would be discriminatory.

Fluctuations in the forex market could become a major problem for banks’ commitments vis-à-vis forex deposits.

“A shock in the market might force banks to announce that depositors would receive their money at the official rate [which is lower than the market rate], like what happened in previous years when the forex rate suddenly surged,” he said. “Forex depositors lost their trust in the banking sector [following that event]. I hope the unification of forex rates will help banks regain the depositors’ trust.”

Iran has been using a dual exchange rate system since 2012 when international economic and banking restrictions were tightened over the nuclear program.

CBI Governor Valiollah Seif has pledged to introduce a floating forex regime by the end of the Iranian fiscal year in March 2017.