The Iranian banking system has established an online gateway that enables members of its interbank foreign exchange market to trade foreign currencies with higher speed and stability.
According to the Central Bank of Iran’s official website, members of the interbank market can engage in forex deals via “Electronic Trade System” or “Internal Reuters” among themselves or with CBI during their working hours.
The project for establishing the online gateway was launched in September 2016 at CBI and after about a year, the system was launched on Oct. 29, in the presence of member banks’ representatives and foreign exchange dealers.
The project is in line with the country’s monetary and banking regulations, as Iran has been trying to establish a managed floating system to unify the rates of foreign currencies.
This is while as per the general policy of conducting foreign exchange transactions through the banking system rather than exchange shops and stabilizing the market, CBI has allowed banks to purchase the hard currency of exporters at open market rates.
In its latest directive, CBI also allowed banks to sell travel currency at open market rates while earlier, banks were offering foreign currency with a cap of $300 to travelers at official rates that were a few hundred rials lower for each dollar compared to the open market rates.
After the online interbank forex trade system went on stream, banks are able to stabilize their net open position by buying and selling foreign currencies via ETS.
Boosting the interbank forex market, raising the speed of deals and their settlement process, improving the management of banking system’s forex assets and liabilities, upgrading forex liquidity management in banks and offering better finance deals to projects and non-oil exporters from the interbank market are other benefits enumerated by CBI.
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