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Monday, December 26, 2016

Official Says Dollar’s Gain Is Not Rial’s Loss 

 

The recent hike in the US dollar’s exchange rate in the Iranian market after the greenback gained against all other major currencies does not equal a weaker rial, claims a deputy economy minister.

“The increase in the dollar’s exchange rate [against rial] in recent weeks has happened because its value has gone up against all other currencies and the global trend of increasing demand for the dollar is the reason for the rial’s decline against the dollar,” Hossein Qazavi was quoted as saying by IBENA.

In an address to a gathering of Bank Tejarat officials, Qazavi said this does not mean that the value of the national currency has fallen.

“The mandate of the Central Bank of Iran under the circumstances is to maintain stability and prevent fluctuations in the currency market, and not necessarily to interfere for realizing a specific rate,” he said.

In mid-November, the US dollar soared to its highest since April 2003 against a slew of currencies in global markets, reaching its strongest in a year against the euro. It advanced past $1.07 per euro for the first time since the start of December 2015.

The American currency broke the 40,000-rial threshold in Tehran’s market on Wednesday, recording an all-time high for the currency. While the American currency had begun to rally in November, the 40,000-rial milestone took the economic officials by surprise.

While the government and the central bank have come under fire for recent currency market swings, officials have sought to allay fears by saying that these fluctuations are temporary and will abate as demand for the currency subsides.

Stressing the necessity of maintaining financial discipline in the government, Qazavi called for better interaction between the government and banks.

If the administration implements measures for a paid-up capital  increase of government-owned banks, he said, “We will witness an improvement in the capital adequacy ratio and lending capabilities of these banks, which will naturally influence other banks as well.”

Referring to the fact that the first draft for a joint bill between the Ministry of Economic Affairs and Finance and the Central Bank of Iran regarding Iranian banks has been readied, he spoke of what the bill would entail.

“If passed, the bill will create significant changes in the way interests for the government’s overdue debts to the banks are calculated. They would be calculated in a way that would be more supportive of banks,” Qazavi concluded.   

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The greenback's rate reached 41,000 rials on Sunday, recording a new all-time high.

Subsequently, Governor of Central Bank of Iran Valiollah Seif said banks should reclaim their “historic and fundamental” role in the foreign exchange market.

Seif made the statement in a meeting with bank executives, as the greenback continues its nonstop rally in Tehran's market.

“Once banks expand their forex operations, moneychangers will go back to their own legally defined business and this would enhance the health and security of foreign trade,” CBI's website quoted Seif as saying on Sunday.

“No considerable measure has been taken by banks yet, even though new regulations give banks more space for offering forex services. Lenders cannot guarantee their profitability only by relying on transaction fees. They need to offer a wide range of services.”

In a statement on Saturday, CBI informed businesses to approach the banking system for purchasing foreign exchange, noting that banks have been permitted to trade foreign currencies at the market rate since July.

The move was aimed at helping the central bank implement its plans for unification of foreign exchange rates by the end of the Iranian fiscal year.

But the new call comes after continued growth in the US dollar's exchange rate against the rial in recent weeks.

The currency registered a significant growth in the past 30 days, compared with November 26 when it was sold for 37,660 rials.

The central bank has announced that the forex rally is transitory  and will be over by the end of the current fiscal year (March 20), rejecting claims that the government is in favor of increasing forex rates to make up for its budget deficit.

CBI also expects an immediate drop in the US dollar's exchange rate after the New Year’s Eve.

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ran said on Sunday it had negotiated to pay only about half the announced price for 80 new Boeing airliners in an order that the American planemaker had said was worth $16.6 billion.

Boeing and its European rival Airbus have both signed huge contracts this month to supply airliners to Iran, the first such deals since international sanctions were lifted against the country over its nuclear program.

Despite Iran's considerable need for new planes to replace those from the sanctions era, it has entered the market at a time when Boeing, Airbus and smaller planemakers have all faced a downturn in orders, and are therefore expected to offer deep discounts.

Boeing said this month it was cutting production of its 777 long-haul jet due to a drop in demand.

"Boeing has announced that its Iran Air contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50% of that amount," said deputy minister of Roads and Urban Development, Asghar Fakhrieh-Kashan, Reuters quoted IRNA as reporting.

Airbus's contract to sell 100 jets to Iran Air, signed on Thursday, would be worth $18-20 billion at list prices, but the head of Iran Air has been quoted as saying the value of the contract would not exceed $10 billion.

Fakhrieh-Kashan also said on Sunday that Iran Air may exercise an option to buy 20 more aircraft from ATR, a European maker of regional turboprops, in addition to a planned firm order of 20.

A team from the planemaker would arrive in Tehran on Wednesday for final talks.

"The final round of talks will be held with ATR representatives (next) week and we expect the Iran Air contract to be signed ... in the following week. The purchase of 20 planes has been finalized and Iran may buy 20 more planes," said Fakhrieh-Kashan, adding that the contract for 20 planes was worth less than $500 million.

In February, ATR, co-owned by Airbus and Italy's Finmeccanica, reported preliminary orders from Iran for 20 ATR 72-600 aircraft and options for another 20.

The deputy minister added that Iran Air will receive eight new Airbus and ATR planes by the end of the current Iranian year (March 20, 2017).

“By the yearend, Airbus will deliver an A320 and two long-range A330 planes to Iran Air,” he said.

The Airbus contract signed on Thursday for selling 100 jets to Iran Air includes 46 of the narrow-body A320s and A321s, 38 long-haul A330s and 16 of Europe's newest long-range model, the A350. The first jet, an Airbus A321 already painted in Iran Air livery, may arrive before the January 20, sources say.

The Boeing deal signed a few days earlier on 80 jets includes 50 of Boeing’s narrow-body 737max 8s, 15 wide-body 777-300ERs and 15 777-9s, which will be delivered to Iran Air over 10 years.

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Iran's currency hits record low as Trump worries deter fund inflows

A money changer poses for the camera with a U.S hundred dollar bill (R) and the amount being given when converting it into Iranian rials (L), at a currency exchange shop in Tehran's business district, Iran, January 20, 2016. REUTERS/Raheb Homavandi/TIMA

By Bozorgmehr Sharafedin | BEIRUT

Iran's rial hit a record low against the U.S. dollar on Monday in a sign of concern about the country's ability to attract foreign money after U.S. president-elect Donald Trump takes office.

The rial was quoted in the free market at 41,500 to the dollar, weakening from around 41,250 on Sunday and 35,570 in mid-September. Before this month, the record low was about 40,000, hit in late 2012, traders said.

Economists said there were several reasons for the slide, including the dollar's strength against many currencies in the last few weeks, and uncertainty before next year's presidential elections in Iran.

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But they said Trump's election in November was a major factor. He has said he will scrap the deal between Iran and world powers that imposed curbs on Tehran's nuclear projects and lifted sanctions on the Iranian economy in January this year.

This would hinder Tehran's efforts to attract tens of billions of dollars of foreign funds to help modernize its economy. Inflows since January have been smaller than the government expected, partly because big international banks fear running into U.S. legal trouble if they deal with Iran.

Many analysts think Washington will stop short of abolishing the deal, but it may apply remaining sanctions on Tehran more stringently. At the very least, uncertainty over Washington's intentions could make companies around the world more cautious about trading with or investing in Iran. 

"The inflow of foreign currency to the country is not as much as the government expected after the nuclear deal," Bijan Bidabad, an Iranian economist, told Reuters in a telephone interview from Tehran. 

At the same time, pro-growth policies in Iran have boosted money supply. "This has changed the proportion between the local currency and foreign currency, increasing the exchange rate."

Iranian officials have denied any link between the U.S. election result and the rial's slide. Samad Karimi, head of the exports department at the central bank, blamed the slide on a temporary surge in demand for dollars for travel and trade at the end of the year, state news agency IRNA reported.

Government spokesman Mohammad Baqer Nobakht said on Monday that the rial's drop was due to “psychological issues" and that the government hoped it would rebound within days.

Nevertheless, traders at some exchange houses in Tehran told Reuters they had not seen a sudden rise of dollar demand in recent weeks - suggesting the reasons for the rial's tumble might be deep-seated.

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If it continues, the rial's weakness could become a political issue ahead of next year's Iranian elections by threatening some of the economic achievements of President Hassan Rouhani, who took power in 2013.

Rouhani's administration stabilized the currency after years of volatility, which helped bring inflation down to single-digit rates from above 40 percent.

Besides the free market exchange rate, Iran uses an official rate, now at 32,317, for some state transactions. The widening gap between the official and free rates has sucked hard currency out of the formal banking system; in an effort to counteract this, the government authorized some banks on Saturday to trade at free rates.

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13 hours ago, screwball said:

Subsequently, Governor of Central Bank of Iran Valiollah Seif said banks should reclaim their “historic and fundamental” role in the foreign exchange market.

Seif made the statement in a meeting with bank executives, as the greenback continues its nonstop rally in Tehran's market.

“Once banks expand their forex operations, moneychangers will go back to their own legally defined business and this would enhance the health and security of foreign trade,” CBI's website quoted Seif as saying on Sunday.

“No considerable measure has been taken by banks yet, even though new regulations give banks more space for offering forex services. Lenders cannot guarantee their profitability only by relying on transaction fees. They need to offer a wide range of services.”

Nice

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News ID:174512
Publish Date: Mon, 26 Dec 2016 18:57:45 GMT
Service: Iran
 
 

Iran's capital market draws more foreign investors

Iran's capital market draws more foreign investors

Central Securities Depository of Iran (CSDI) issued 14 new trading codes for foreign institutional investors in the month to December 21, said the head of the CSDI.

Iran's Securities and Exchange news agency (SENA) quoted Mohammadreza Mohseni as saying, "This brings the total number of foreign institutional investors to 141."

Institutional investors, which received codes to trade in Iran's capital market, are from Georgia, the UAE, Afghanistan, Indonesia, China, Oman, Germany and Sweden, he added.

Mohseni further said that nine investors from the US, Switzerland, Azerbaijan, Poland, China, Iraq and Afghanistan received their trading codes in previous months.

He added that 769 trading codes have been issued for foreign traders since 1994.

Currently foreign traders trading in Iran's capital market are from the United States, Russia, the UK, Spain, Poland, Azerbaijan, the UAE, Maldives, Poland, Hong Kong, Qatar, Iraq, Luxembourg, Kuwait, New Zealand, South Korea, Germany, Switzerland, Sweden, Uzbekistan, China, the Netherlands, India, Turkey, Lebanon, South Africa, Japan, Cyprus, Italy, Norway, Greece, Indonesia, Pakistan, Armenia, Afghanistan and Malaysia.

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Iran Center for E-Commerce Development, e-commerce industry’s top body, is set to regulate the operation of unofficial payment tools, referred to as aggregators, after profiling owners and their users (receivers), said Faranak Razeqi, the center’s deputy.

Payment aggregators will be authorized only if they meet technical standards of Shaparak, the payment industry’s regulator.

“Receivers need to provide the center with information about their identity,” she was quoted as saying by Way2pay.ir.

Users will be classified in different groups, which define a cap for the total money they are allowed to receive.

The primary plan requires users to provide a phone number for being allowed to use payment services, she added.

Back in March, authorities decided to block almost all the unofficial payment tools. The move was estimated to have killed over 1,000 jobs that relied on non-bank payment services for running their businesses.

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Bank Mellat, a leading Iranian privatized bank, has fully established corresponding relations with more than 100 lenders worldwide, said an official of the bank.

Alireza Lagzaei, Bank Mellat’s vice director, said the bank has been working on reopening accounts with foreign lenders that were closed following the imposing of sanctions against Iran’s banking system, Banker.ir reported on Monday.

The banker also added that forex operations in his bank have doubled compared with last year.

“Payment orders had a larger share in the bank’s forex operations, as customers prefer to use payment orders rather than letters of credit,” he said.

Lagzaei added that Mellat’s subsidiaries in Germany, Eihbank, and in the UK, Persia International Bank, have managed to resume operations, after receiving permission from financial authorities.

Eihbank is jointly owned by the Bank of Industry and Mine, Bank Mellat and Bank Saderat Iran. PIB is jointly owned by Bank Mellat and Tejarat Bank.

According to the banker, Bank Mellat plans to expand operation in South Korea, through its branch in Seoul.

The lender is reportedly planning to launch a subsidiary and a branch in Malaysia and Georgia respectively in the next two months.

Three branches of Bank Mellat in Turkey, one each in Ankara, Istanbul and Izmir, also began operations in February.

Back in October, it was announced that Yerevan-based Mellat Bank CJSC, fully owned by Iran’s Bank Mellat, increased its authorized capital in compliance with the new requirement of the Central Bank of Armenia.

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The brouhaha surrounding the condition of Iranian banks is valid, as the crisis has been brewing for a long time. Oddly, what has now unfolded due to years of regulatory neglect and mismanagement by lenders has been blamed on an overhaul of the banks’ financial statements ordered by the Central Bank of Iran.

Instead of admitting their wrongful practices and seeking help, banks have engaged in senseless wrangling that will do nothing to end their woes which has culminated in their trading halt in the stock market. This has left shareholders and investors in a limbo for close to three months.

The controversy began when it was disclosed that Bank Saderat, the biggest of the three banks privatized in recent years, has incurred huge losses in the first half of the 2016-17 financial year. Soon, it became known that Saderat was only one of a posse of banks whose new balance sheets have sunk in the sea of red ink, prompting the Securities and Exchange Organization to suspend the share of some 14 banks from trading.

It is said that only the suspended shares of the three major privatized banks are worth over 140 trillion rials ($3.39 billion at market exchange rate), which accounts for roughly 4% of the total value of the equity market. This has caused both uncertainty and panic among investors and even prompted fears of a bank run, which–at least for now–appear to be immature.

But one lesson to be drawn from all of this is the inevitable that banks would have to accept. Emerging from a decade of sanctions, banks have been cut off from international dealings for too long but their pre-sanctions’ ways will no longer work–not if they want to be more than provincial entities.

CBI’s new balance sheets for banks first unveiled in February, which are in line with the International Financial Reporting Standards , only mirror banks’ troubles.

The present situation should be enough to galvanize banks into action, as it has been for their peers across the world.  On Friday, the Italian government approved a decree to bail out Monte dei Paschi di Siena after the world’s oldest bank failed to win investor backing for a desperately needed capital increase.  

Monte dei Paschi is the poster child among Italy’s notoriously troubled banks. It emerged as the weakest of some 51 European banks subjected to stress tests earlier this year by the European Central Bank.

 I Change, Therefore I Am

Likewise, pundits in Iran have prescribed a slew of measures for addressing the predicament of Iranian banks–going as far as recommending a state bailout. The government has, in fact, approved a capital increase for public-sector banks by revaluing the central bank’s foreign exchange assets, an act that has not remained without controversy.

But before agreeing on any solutions, banks should acknowledge their own problems and take responsibility for it. Once they do that, they will be ready to embark on a series of reforms that the CBI has been consistently advocating.

The fact that Iranian banks are still pursuing the expansion of physical branches in this electronic age is a grim reminder that they are way behind the times. Similarly, their low capital adequacy levels, their alarming level of bad debts, their botched real-estate investment and persistent government debts are bleak indicators that need to be resolved immediately.

A CBI September report indicates that time deposits of non-government banks and credit institutions are about 13.48 times their capital levels. Iran’s economy being bank-based makes reforms a necessity.

The mad race to attract more savings by offering higher interest rates on deposits is another bane of the banking system and CBI’s measures to impose rates on banks have only worsened the situation.

In a nutshell, all have to accept that the denial of the pain is no remedy for it and the halting of trade for banks–no matter how long it continues–is not a viable solution. CBI, therefore, should insist on implementing its groundbreaking regulatory measures come high or hell water.

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High dollar rates spark criticisms in Iran

Tue Dec 27, 2016 7:47AM
  1. Home
  2. Iran
  3. Economy
dollar, rial, exchange rate
dollar, rial, exchange rate

The runaway dollar has sparked serious concerns in Iran over what many believe could eventually prove costly for a country which has been planning for months to reap the benefits of the removal of the sanctions.  

The surge of the greenback into the channel of above 40,000 rials prompted criticism against the government of President Hassan Rouhani in the media as was evident from the front pages of local newspapers on Tuesday. 

Sharq newspaper – affiliated to the reformist camp – called on the government to pump dollars into the market to help ease the rising rates.  

It questioned why Rouhani’s financial team was failing to do so, suggesting that the government was reaping the benefits of Iran's rial tumbling to a record low against the dollar.  

8ddf9f3a-1236-4125-9368-c96663fbfdf1.jpg President Hassan Rouhani facing criticisms at home over rising dollar rates.

“The government [of President Rouhani] is benefiting from the high rates of the dollar and is preventing the Central Bank of Iran (CBI) from interfering to control the market,” it wrote.  

“If the government fails to control the rate of the dollar, it will lose its greatest achievement [the stabilization of the dollar rate] at a time when the country is preparing for next year's presidential election.” 

At the end of trading on Monday, the rial was quoted in the free market at 41,500 to the dollar, weakening from around 41,250 on Sunday and 35,570 in mid-September. Before this month, the record low was about 40,000, hit in late 2012, Reuters reported.

Aftab-e Yazd highlighted remarks by unnamed CBI officials as well as Mohammad-Baqer Nobakht, the government spokesman, who said that the recent rise in the dollar rates was “temporary” and that it would soon subside. 

“Around the same time each year when the world is preparing for the New Year holidays, there is a surge in the rates of the dollar,” the daily quoted Nobakht as saying, highlighting his suggestion that the dollar exchange rate was rising owing to "psychological factors."   

“This is a result of psychological issues. The rise of 1,000 rials in the rate of the dollar is not acceptable to the government and hopefully the dollar will ease."

Pedram Soltani, one of the country’s top merchants, told Arman newspaper that the slide in rial could hurt Iran’s industrial production.  

“The rapid rises in the rates of the dollar … will increase production costs,” said Soltani, who is also the first vice president of Iran's Chamber of Industries and Mines. 

It is for the same reason that it is incumbent on the CBI to gradually increase the dollar exchange rate in tune with the inflation, he added. Any failure to do so would enable the dollar to gather force and release its energy into the market – what is today blamed for the recent surge, he warned.  

Meanwhile, Reuters in a report put the blame for Iran's currency fall on fears over the potential risks to Iran’s economic plans once US President-elect Donald Trump takes office. 

Reuters has specifically highlighted Trump’s promises to undermine a landmark nuclear deal that Iran sealed with world powers last year – what eventually led to the removal of some economic sanctions against the country.  

Ebtekar newspaper also echoed warnings that the slide in the national current value could undermine Rouhani’s popularity ahead of next year’s election.  

When Rouhani took office, the dollar had already increased by 298.5 percent during the tenure of his predecessor Mahmoud Ahmadinejad (2005-2013), it wrote. 

Rouhani was able to stabilize the currency market despite severe impacts of the sanctions as well as low oil prices. 

“It was expected that the government would continue the previous trend in face of difficulties now that it is in the last year of its tenure.” 

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Here's and play from the past!

IRAN PLANS TO KNOCK THREE ZEROS OFF CURRENCY: REPORT

Wed, 01/20/2010 - 14:05 EDT - France24.com - Business

Iran plans to knock three zeros from its national currency, the rial, so it can recover value it has lost in recent years, President Mahmoud Ahmadinejad was quoted as saying on Wednesday."We are due to remove zeros from the currency... because for some reasons the rial has depreciated and we should bring its real value back," the Mehr news agency quoted Ahmadinejad as saying.The rial has dropped on international exchanges from 70 to the dollar at the time of the Islamic revolution in 1979 to around 10,000 rials today.

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Here's and play from the past!

IRAN 'PLANS CURRENCY REFORM, SEEKS DOLLAR PARITY'

Mon, 04/11/2011 - 06:49 EDT - France24.com - Business

Iran plans to slash four zeros from its national currency in "one to two years", seeking parity between its rial and the US dollar, Central Bank Governor Mahmoud Bahmani has said."The new rial (...) will be equal in value to one (US) dollar," the official IRNA news agency quoted Bahmani as saying late Sunday. He added the plan would take "one to two years" to be implemented.Bahmani did not indicate whether the authorities would try to maintain a fixed parity beetween the greenback and the Iranian currency following the planned reform.

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IRAN READY TO SELL OIL IN ANY CURRENCY: CENTRAL BANK

Fri, 08/13/2010 - 11:46 EDT - France24.com - Business

Iran has made arrangements to start selling its oil in any currency rather than just the US dollar, central bank chief Mahmoud Bahmani said in a report on Friday."We will do our trade in any currency possible," said Bahmani, quoted by the ISNA news agency, without giving a launch date for the policy or specifying if Iran would refuse to be paid in dollars."Maybe a country wants to use its own currency in trade -- we will accept that," he said, adding that the Islamic republic would have to absorb any "additional cost" associated with the switch.

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per year.....hmmm
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Hey pp,  just curious if u have heard anything else from ur friend over there?  It's been awhile so I was wondering if (s)he figured whats going on yet with the rename and them talking about the zero(s). I think we get the best info from ppl on the ground. That's y I like that Adam has contacts over there. Hoping ur friend can find some news or figure out what all this means. 

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11 hours ago, screwball said:

80 to 90 planes a year?! :blink:

The USA just have to had been ready to loosen up it's grip regarding the crazy sanctions placed, because they're getting a piece of this! $$$ 

Cash in time just have to be eased when the time comes, hopefully around the March 20th, 2017?? :confused2:

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The Majlis Economic Commission is to hold a meeting with Economy Minister Ali Tayyebnia and Central Bank of Iran Governor Valiollah Seif to discuss the recent upheavals in the Iranian forex market, which have seen the US dollar gain considerably against the rial, announced the head of the commission.

“Negotiations were held yesterday (Monday) with the CBI governor regarding currency market fluctuations and his explanations were heard but the efforts of the government and the central bank in managing the currency market are inadequate,” Mohammad Reza Pour-Ebrahimi was also quoted as saying by Banker.ir.

“Considering that the bill pertaining to the sixth five-year development plan (2016-21) is being reviewed, a joint meeting will also be held with the minister of economy and the CBI chief  about fluctuations in the currency market to help the government manage the tumult in the market efficiently,” he added.

The US dollar’s surprise rally in Iran’s currency market has become a hot button issue in the past couple of weeks, with the greenback breaking the 40,000-rial threshold in Tehran’s market last Wednesday and gaining more ever since.

Pour-Ebrahimi identifies the soaring greenback rate against all major currencies as the major reason for its gain against the rial.

In mid-November, the US dollar rose to its highest since April 2003 against a basket of currencies in global markets, reaching its strongest in a year against the euro. It went past $1.07 per euro for the first time since the start of December 2015.

The head of the commission also attributed the phenomenon in part to the failure of Iranian petrochemical companies in injecting their foreign currency revenues into the market, saying they are usually in favor of keeping their forex assets for paying end-of –the-year dividends in late March.

This plays a part in “disturbing the market balance, a thing that need to be reviewed”, he added.

  Currency Futures

According to Pour-Ebrahimi, the central bank must move swiftly to manage the “artificial demand” in the market considering that the country is weighed down by economic recession and a lack of suitable production rate is visible in various markets.

He noted that increased volatility in the market was further exacerbated by a hike in speculative activities.

“The central bank has created conditions based on which all banks and bureaux de change can trade in the currency market so that the market swings can be partially controlled,” he said.

“But it must be accepted that the central bank should have a more efficient management because it is the entity with the authority to manage the market.”

The commission chief also proposed the establishment of a currency futures market, saying that this will help convert a portion of immediate demand for dollar in the currency market into financial instruments, which is prevalent across the world.

Pour-Ebrahimi noted that such a market has been established in many countries and currency dealings take place through financial instruments.

“Therefore, with the establishment of a currency futures market, the artificial demand in the currency market will be addressed and grounds will be prepared for removing physical transactions from the market by moving toward derivatives markets,” he concluded.

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Bank Melli Iran, the state-owned giant lender, has issued 3,100 payment orders in foreign currencies worth over $1 billion, said the bank’s CEO. BMI has recorded a 270% growth in the total number of issued payment orders and a 180% growth in their value, Mohammad Reza Hosseinzadeh was also quoted as saying by BMI’s website. BMI also announced that it has granted loans to more than 1 million applicants during the eight months to November 20. The lender has paid 532.6 trillion rials ($16.4 billion) to various business sectors during the period. BMI has paid loans to 44,000 applicants active in agricultural and industrial sectors during the period. Housing and construction sectors took out 7 trillion rials ($216.6 million) in loans from the bank.

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Many illegal bureaux de change have been identified and a number of them have been fined heavily, said the director general for banking regulations, licensing and anti-money laundering at the Central Bank of Iran.

“The authorities have taken legal measures against those who fail to obtain licenses for their currency exchange activities. So far, a large number of illegal exchangers have been identified and met with disciplinary action, some of whom will be fined heavily,” Abdolmahdi Arjomandnejad said in a talk with IBENA.

Arjomandnejad said based on regulations, moneychangers who purchase, sell or transfer currency without obtaining a license from the central bank are operating illegally and their actions constitute currency smuggling.

According to the official, a variety of policymaking and executive measures have been undertaken collectively in recent years.

These measures include “reviewing regulations on the establishment, activities and supervision over bureaux de change, taking disciplinary measures against these entities and easing paperwork related to obtaining licenses to create new bureaux de change or extending the licenses of existing ones”, he added.

The CBI official further said that while the rise in the number of applicants seeking licenses for these entities was relatively low at the beginning, it has begun to skyrocket since.

“This rise has been such that At present, an average of 10 to 20 licenses are issued weekly,” he said.

Arjomandnejad announced that about 400 exchangers have been registered at CBI and received a license.

He says because no new licenses were issued for moneychangers for a few years, their applications had piled up, but things have since changed.

“The review of applications is now up-to-date and the central bank begins work as soon as the relevant documents are posted, which allows applicants to receive their licenses in the shortest amount of time,” he said.

The CBI official noted that a number of applications might face hurdles for a number of reasons pertaining to the applicant. He assures, however, that with proper paperwork and smooth handling of applications, applicants could potentially receive their licenses “even in a matter of few days”.

Arjomandnejad stressed the need for adhering to standards pertaining to anti-money laundering and combating the financing of terrorism in the framework of domestic regulations.

“Increasing transparency will block many economically, financially and even socially corrupt actions and lead to the economic and financial health of the country,” he said.

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