Single Forex Rates Still an Option

The Iranian government will implement plans for the unification of foreign exchange rates when the market regains stability, the government’s spokesman announced late Saturday.

“Forex rates are expected to become stable, considering the measures taken by the Central Bank of Iran [in recent days],” Mohammad Baqer Nobakht also said during a televised interview.

The official added that fluctuations in the forex market are natural in winter and “demand for foreign currencies grow as we get closer to the New Year’s holiday season”.

Nobakht confirmed that the government has set the US dollar rate at 33,000 rials in the next year’s budget plan.

Minister of Economy Ali Tayyebnia also said that the recent swings in currency markets are transitory.

 “The US dollar rate [against the rial] has grown by 3-4% during the past three years, which is a big achievement for the country, as it is lower than the rate of inflation,” he said in an interview with ISNA on Saturday.

The US dollar has experienced significant growth in recent weeks. According to Iran’s Association of Bureaux de Change, the currency sold for 39,000 rials on Sunday.

Central Bank of Iran Governor Valiollah Seif had earlier announced plans to end the country’s dual exchange rate regime by the end of the Iranian year (March 20, 2017) and let the rial float against other currencies in a “managed” way.

However, recent market volatility seemed to have put the kibosh on the plan.  

The CBI late last month allowed banks to trade in the foreign exchange market, paving the way for the adoption of a single forex rate regime.