Single Forex System Replaces Multi-Tier Forex in Iran
The Iranian government has decided to change their foreign exchange system, the Iranian economic minister said it plans to introduce the single foreign exchange system as a replacement for the formerly operated Multi-tiered foreign exchange system. According to Ali Tayyeh-Nia, “The condition for unifying forex rate should be met in the country’s economy so that this plan could be implemented”.
March 21 this year is the proposed start date for the single forex system in the country. This date marks the beginning of a new economic year for Iran. So, if all economic expectations fall through, then the new single forex system will be launched on the date fixed.
The target of the Iranian government is to reduce its rate of inflation and unify the foreign exchange rate. Mr. Ali Tayyeb-Nia also said that “a single forex rate system will be possible only after financial markets witness relative calm”
However, Valiollah Seif, the Iranian governor of their Central Bank did not support the unification of foreign exchange now, according to him, the Iranian stable economy goal should be achieved before focusing on foreign exchange.
The rate of the Iranian currency fluctuates frequently and does not have a fixed rate, since it is traded at two different rates. The central bank of Iran sets one rate, while the other rate is set in the open market by money changers – this shows that a unification of the Iranian foreign exchange is imperative.
The value of the Iranian currency against the United States dollar is 27,700 officially by the central bank of Iran, and then 34,000 in the money changers market.