Economy, Business And Markets

Greenback Reaches 41,000 Rials

Greenback Reaches 41,000 RialsGreenback Reaches 41,000 Rials

The greenback's rate reached 41,000 rials on Sunday, recording a new all-time high.

Subsequently, Governor of Central Bank of Iran Valiollah Seif said banks should reclaim their “historic and fundamental” role in the foreign exchange market.

Seif made the statement in a meeting with bank executives, as the greenback continues its nonstop rally in Tehran's market.

“Once banks expand their forex operations, moneychangers will go back to their own legally defined business and this would enhance the health and security of foreign trade,” CBI's website quoted Seif as saying on Sunday.

“No considerable measure has been taken by banks yet, even though new regulations give banks more space for offering forex services. Lenders cannot guarantee their profitability only by relying on transaction fees. They need to offer a wide range of services.”

In a statement on Saturday, CBI informed businesses to approach the banking system for purchasing foreign exchange, noting that banks have been permitted to trade foreign currencies at the market rate since July.

The move was aimed at helping the central bank implement its plans for unification of foreign exchange rates by the end of the Iranian fiscal year.

But the new call comes after continued growth in the US dollar's exchange rate against the rial in recent weeks.

The currency registered a significant growth in the past 30 days, compared with November 26 when it was sold for 37,660 rials.

The central bank has announced that the forex rally is transitory  and will be over 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.

CBI also expects an immediate drop in the US dollar's exchange rate after the New Year’s Eve.

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