Moneychangers Outflanked by Banks as CBI Issues New Directive

The Central Bank of Iran has issued a foreign exchange directive that curbs the activities of bureaux de change and increases banks' role in forex trading, the CBI governor announced.

"Decisions have been made in line with creating balance and stability in the markets," Valiollah Seif was quoted as saying by Bank.ir.

The CBI governor explained that during years of sanctions when banking relations with foreign lenders were cut off, banks could not open letters of credit and the responsibility fell on bureaux de change.

The new directive, which officially came into force on Sunday, limits the activities of Iranian moneychangers and shifts it to the banking system.

Letters of credit are now opened specifically by banks that receive at least 10% of the total amount of L/C in advance.

"To engage in imports through the banks, the initial rate of the dollar has been set at 36,000 rials and when the time comes for settling the debt, the deal will be finalized at the open market rate when the L/C was issued or the time of the settlement," Seif said.

The CBI chief explained that bank customers can choose to settle their debt at the lower rate.