Increasing transparency and eliminating the benefits of the speculators and currency renders network are the main achievements of the formation of the organized foreign exchange market, which should be welcomed.

Last year, on the same days, with the rise of incandescence in the exchange market, a dollar of $ 4200 was born, after which different markets, in other words, different rates were born one by one, and made the country's foreign exchange market more turbulent. But the exchange market started the year 2019 with a countdown to begin the “Organized Currency Market", and everyone is waiting to see if this new strategy can reduce the complexity of the dollar's value in the country.

To summarize the speech of the governor of the Central Bank and some of the currency market experts from around the country, we will come to the following:

The organized currency market is an online and transparent marketplace for exchanging currency cash on an electronic platform. Its objectives, in addition to transparency of transactions, are the discovery of rates based on specific frameworks and deepening the market to reduce the volatility, especially the emotional volatilities.

In other words, a market is formed in which the selected traders, as the agents, are required to disclose the prices on the basis of the supply and demand, and provide the dollar or other currencies, to the extent that is required both at micro and macro level, on the same day. Suppliers and marketers are well-known for this market, and the market is available to many exporters and currency holders to sell their currency on the market. The Central Bank can also manage the currency market unwary, and whenever fluctuations in the market intensify, it will manage the market through traders and protect from the consequences of legal and judicial problems. Indeed, the primary goal of this market is to control foreign currency bills market, which, although the volume is far less than the total exchange market, but the main determinant of the free market price is the purchase price of the foreign banknotes, which causes strong currency fluctuations.

In fact, all of the above is a summary of what is supposed to be done, which might have to happen much before than that, but the question is whether there are factors that might disturb what are addressed by government and Central Bank officials?

Past experiences have shown that part of the problems have been created by the structure of the country's economy, in other words, it has a structural root. Typically, the current rate of smuggling in Iran is very significant, and this market is surely opposed to transparency; therefore, it tries to push its demand to parallel markets, especially the free market, so that it does not show any traces.

Another problem is the tax issue of this market. Indeed, if there is no certainty as to how much tax is levied on this market, market actors even legitimate traders continue to use the same old ways to collect currency rather than the way in which they have to be responsive for their performances or to indicate their volume of trade for tax administration. Also, many currency holders will not be willing to submit their bills if the price of this market is significantly different from the price of other markets, for example the free market.

In addition, there is a large network of dealers abroad that have gained huge profits in these years because of distorted pricing. Many of these networks affect the market by managing the websites that announce price. Therefore, it is a mistake to think that this corrupted network easily leaves the field to an internal competitor.

It should be kept in mind that the organized currency market is a necessity for the country's economy, which should have been started much earlier; however, as a step forward for the country's economy, it should be welcomed.

Mohammad Golshahi



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