Walkingstick: Monday, April 11, 2016 – 02:00
Opportune Time for Single Currency Rate
Economy Business And Markets
Now it is the most opportune time for the unification of foreign exchange rates – a measure crucial for improving the struggling economy and moving forward, a former official of the central bank says.
“The first half of the current fiscal year (started March 20) is apparently favorable for unifying currency rates because most businesses and importers are already conducting their trade at the market rate,” Heidar Mostakhdemin Hosseini was quoted as saying by bankemardom.com
Highlighting the need and benefits of a unified forex regime, he said ‘’Allocating subsidized hard currency to a limited line of manufactures and products in essence gives rise to rent-seeking and corruption.
So, in order to expand and improve economic opportunities in the aftermath of the implementation of the nuclear deal, a floating exchange rate system is without doubt crucial to avoid economic problems (in the future).”
Since 2014 the government and the Central Bank of Iran have cleared the way for the unification of forex rates by limiting the allocation of foreign currency at official rates to less than 10 categories of imported goods,” he said.
On the future of forex rates, he said, “We are just at the beginning of the new fiscal year and it is not possible to make precise forecasts.
However, it can be said with a fair degree of certainty that currency rates will not decline any further.”
In Sunday’s trade, the US dollar was sold for 34,850 rials in Tehran, a 0.09% or 30 rials increase compared to the previous day. The euro was up by 0.4% and bought 39,760 rials.
Short Url : http://financialtribune.com/ar…..rency-rate
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Walkingstick: Monday, April 11, 2016 – 02:00
TCCIM Wants Market to Decide Currency Rates
Economy Business And Markets
Businesses expect the Central Bank of Iran to refrain from interfering in the foreign exchange market and let the market decide the rates, said Masoud Khansari, head of Tehran Chamber of Commerce, Industries Mining.
“Instead of setting rates by fiat, the government and the CBI would do better to manage the fluctuations in the market by drawing on the foreign exchange resources, which is mostly under their control,” TCCIM’s website quoted him as saying on Sunday.
Rates in a single foreign exchange regime should be “based on the supply and demand mechanism in the market. But the supply side should not be manipulated by the CBI.”
He referred to problems caused by manipulation of forex rates in 2011, like the huge jump in inflation rates and rampant speculation and said, “Unreal forex rates not only fail to improve the country’s export revenues—as the government intends- but it causes considerable harm to the national economy.”
The CBI’s plans for unification of forex rates should include an efficient mechanism to prevent the possibility of losses the various economic sectors may incur, he stressed.
Khansari also noted that there would be need for the so-called forex trade center if a single forex rate regime exists because then “hard currency dealers and the central bank would offer one and the same rate.”
Iran has been using a dual exchange rate system since 2012 when international economic and banking restrictions on the country were tightened due to the dispute over the nuclear program.
Short Url: http://financialtribune.com/ar…..ency-rates
