Economy, Business And Markets

CBI Expects Forex Rate to Drop on Jan. 1

CBI Expects Forex Rate to Drop on Jan. 1
CBI Expects Forex Rate to Drop on Jan. 1

The US dollar exchange rate is expected to drop after the New Year Eve, said the Central Bank of Iran’s head of Exports Department.

The currency registered a big recent rally in Tehran market, reaching an all-time high against the rial on Wednesday.

“The recent surge in dollar’s exchange rate is mainly caused by growth in demand and shortage of the currency in the market. Demand will decrease after the turn of New Year,” IRNA quoted Samad Karimi as saying on Thursday.

The official warned the public to refrain from exchanging their assets for foreign currency and dabbling in speculative activities.

The US dollar broke the 40,000-rial threshold in Tehran's market on Wednesday, recording an all-time high for the currency. It was sold for 40,200 rials at the close of trade on Wednesday, according to the website of the Association of Bureaux de Change Operators of Iran.

The greenback was slightly down on Thursday and exchanged for 40,150 rials at the close of the day.

Earlier, the central bank had repeatedly announced that the forex rally is temporary and will abate by the end of the current fiscal year (March 20), rejecting claims that the government is in favor of increasing forex rates to make up for its budget deficit.

“The CBI is prepared to control rates in the market during the final months of the Iranian fiscal year, by using revenues from non-oil exports,” Karimi said.

According to the secretary-general of the Association of Petrochemical Industry Corporations, petrochemical companies have reached an agreement with CBI to inject currency into the market in an orderly weekly basis.

At the same time, Karimi admitted that speculation, forex futures deals and smuggling of foreign currencies are making it difficult for CBI to regulate the market.

The central bank has been taking measures to limit unhealthy operations in the forex market, including a crackdown on unauthorized moneychangers and allowing banks to conduct forex operations in the open market.

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