Economy, Business And Markets

New System Sorts Out FX

New System Sorts Out FXNew System Sorts Out FX

The foreign exchange market will come under better central bank oversight as soon as the newly-set regulations are enforced, a senior monetary official said on Wednesday.

Earlier this week, the Central Bank of Iran (CBI) introduced a web-based information system called Sana to bureaux de change across the country, through which they are informed of exchange rates and number of trades. Substantial trades amounting above $10,000 should be done only within the official working hours of the bureaux, which were set between 10:00 am and 18:00 pm.

With the new system, calm would return to the market, said Gholamali Kamyab, vice governor of foreign exchange affairs of the CBI.  Previously, there were no clear cut set of regulations available through which official trade rates were communicated in the market, but the new regulations will now help sort out foreign exchange trades.

The Iranian Association for Exchange (IAE) will announce average foreign exchange rates by the hour, Kamyab stated, adding that those who do not have official permits are not allowed to announce exchange rates on websites.

The new system, he said, will be introduced to the IAE, which is expected to pass them to bureaux de change. The IAE must also announce foreign exchange rates and the actual transactions in the market by the hour and the weighted average of all currency transactions of the previous day.

Many deals in the foreign exchange markets are bogus, said the official. “Bogus deals would help certain dealers to manipulate the market, paving the ground for them to set desired prices during the trading day.”

The official said that the enforcement of the new regulations will eventually eliminate unauthorized speculations. They have already been communicated to other affiliated organizations including the law enforcement force and state prosecutor’s office.