Launching integrated forex market postponed

Central Bank of Iran (CBI) has postponed launching the integrated forex market which was due to start operation by mid-August, Tasnim news agency reported.

According to Tasnim, the reason for this decision is reported to be the incomplete registration of some member currency exchange shops as well as the failure of designated banks to participate in market operations.

CBI and the executives of the Integrated Foreign Exchange Market Corporation are aiming for a significant presence of exchange shops and banks to create a greater impact.

Currently over 120 exchange shops have joined the integrated market which means for the time being 40 percent of the country’s authorized exchange shops are now members of the integrated market.

In early January, Money and Credit Council (MCC), the highest banking policy-making body of CBI, approved establishment of an integrated forex market as the CBI aims to explore the real volume of demand and supply in the foreign currency market through a new mechanism.

While, this mechanism is planned to organize the transactions in the forex market between the exchange shops, some also say that it may omit other exchange rates, including NIMA rate, gradually.

NIMA (Iran’s Forex Management Integrated System) has been launched in early July to allow the exporters of non-oil commodities to sell their foreign currency earnings to importers of consumer products.

In late May, some news websites published that NIMA will be omitted once the integrated forex market is launched, although CBI governor dismissed those news, saying that NIMA is a pivot of the foreign currency exchange and trade related activities in the country and it will not be omitted from the forex market at all.

While CBI does not support the idea of omitting NIMA, some are supportive to such approach and say that integrated forex market can replace NIMA.

source: Tehran Times