Forex Futures Market Underscored

In order to protect businesses against foreign exchange fluctuations and promote a relative stability in the forex market, the establishment of a currency futures market can be a good solution, the CEO of the Export Development Bank of Iran said. “A businessperson happens to take out a foreign exchange loan and, due to fluctuations in foreign exchange rates, faces difficulties [in repaying it],” IBENA quoted Ali Salehabadi as saying.  The official noted that the risk of volatility in the forex market might be covered through currency futures so that businesses do not incur losses. Noting that such a market could also help reduce trade risks for importers and exporters, Salehabadi added that it could also act as a buffer against the inflation. In December 2015, the Central Bank of Iran had approved the launch of a foreign exchange futures market under the supervision of Securities and Exchange Organization, but the creation of the market awaits the unification of dual exchange rates.