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Code: 50312 Visited: 39 Publish Date: Jul 11 2018 - 1:13
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Capital Market
The Secondary Market for Currency Exchange
Tehran, Jul. 10 (SENA) - Following Iranian rial dramatic depreciation and then the unification of the long-standing two-tier dollar rate by the government, a black market formed where the dollar was quoted against the rial as high as 85,000, reportedly.

Tehran, Jul. 10 (SENA) - Following Iranian rial dramatic depreciation and then the unification of the long-standing two-tier dollar rate by the government, a black market formed where the dollar was quoted against the rial as high as 85,000, reportedly. The exporters refused to abide by the government’s request to sell their currencies at the official rate to the Central Bank and the importers were arguing that the resources are not answering their needs.

To tackle the issue, the government and the CBI announced that a secondary market will be formed where the exporters can sell their currency reserves to the importers via price discovery mechanism. Head of the Economic Committee of the Parliament, Mohamadreza Pourebrahimi laid out the details of the final decision by the government coordinated with the parliament. “Today is the beginning of the trades. Oil export resources will be allocated to basic goods including medicine, raw materials, livestock and agriculture inputs at the determined rate and other goods will be given discovered rate provided by non-oil exports,” he said.

The parliament’s initial suggestion was to employ financial instruments in the capital market like salam, futures and options, but CBI preferred to run and manage the trades itself using a new platform. “In a letter to the president, the parliament underlines that for the market to function effectively and have sufficient depth and breadth, all non-oil export resources need to be eligible for trade at the secondary market and must not be limited to the third category exports [all goods except for petrochemicals and base metals like steel and cooper],” he added.

According to CBI officials, exporters are allowed to transact 20% of their currency resources from non-oil exports with the importers of the third category goods. “parties to the transactions can use the platform provided by the Ministry of Industry, Mine and Trade or the new platform called NIMA provided by the CBI where the supply and demand will discover the exchange rate.” Said Mahdi Kasraee, Director General for Currency Regulations and Policies at CBI. Currency exchanges affiliated to domestic banks will be the brokers for trade parties and there will be no fluctuations limit.

 
By: Security and Exchange News Agency (SENA)
 
 
 
 
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