The unification of foreign exchange rates and establishment of an interbank forex market are prerequisites set by the Central Bank of Iran for launching a foreign currency futures market, according to the head of Iran Mercantile Exchange.
“We have held five meetings with CBI officials to address their concerns about the establishment of currency futures. IME is prepared to launch a forex bourse when the central bank unifies the foreign exchange rates and establishes the interbank forex market,” Hamed Soltani-Nejad was quoted as saying by Mehr News Agency on Saturday.
Elaborating on other measures for launching a forex bourse, he said, “We have developed the needed platforms and a rulebook for market operations, and the US dollar and euro have been selected as the base assets. We have also held talks with bureaux de change operators to persuade them to participate in the market.”
Soltani-Nejad considered CBI’s decision allowing banks to enter the forex market to be a positive move, saying it was “one step toward the unification of foreign exchange rates”.
The Central Bank of Iran is planning to unify forex rates by the end of the fiscal year (March 20, 2017). In line with the plan, the CBI has officially permitted banks to start trading in the forex open market in line with its declared aim of unifying foreign exchange rates.
The directive allows banks and customers to negotiate the rates. Before the CBI decision, forex trade in the parallel market was dominated by powerful bureaux de change and street money changers.
Iran was forced to revert to the controversial double exchange rate regime after nuclear-related sanctions unleashed turmoil in the forex market in 2011-12 in which the national currency lost almost 70% of its value within days.
Soltani-Nejad noted that an interbank forex market could also be used when customers of various banks want to trade with each other.
“Forex dealings of banks would also take place in the interbank market,” he said.
