How did the currency market calm down? – rahnam

According to rahnam news agency, why did the dollar not become expensive? It is a subject that is discussed in many economic circles these days; Meanwhile, some economic experts who are critical of the government during the past months constantly criticized the inflationary expectations and analyzed that they should wait for the price of the dollar to rise up to 60,000 to 70,000 tomans, and they considered it a natural result of the country’s economic conditions! But what was finally printed on the price board was 49 thousand tomans, but what happened that made it like this?

The central bank’s solution stabilization policy

The implementation of the stabilization policy, along with the intensification of regulatory measures in the field of controlling the balance sheets of banks and controlling the growth rate of the monetary base and liquidity, provided a suitable platform to curb the unruly currency market, so that negative news and regional and international political developments could not create a platform for creating currency shocks. The Central Bank was able to establish a suitable balance between foreign exchange and trade policy.

In order to create a balance between the country’s foreign exchange and commercial policy as the two wings of the country’s foreign trade, with the aim of creating predictable conditions in the foreign exchange market to create a stable environment for economic operators, during the first six months of this year, the central bank has implemented a set of measures within the framework of economic stabilization policies around the axes “Control of liquidity growth”, “Predictability of the economy and currency market” and “Revision of the regulations” are in progress.

The result of this policy, in the shadow of allocating more than 50 billion dollars of foreign currency to meet the basic and capital needs of the country while guiding the country’s economy in a stable path, sent this message to the economy that they can do production and investment without worrying about currency shocks. do

A look at the performance of the Central Bank in the field of foreign exchange shows that the calm prevailing in the foreign exchange market despite the negative political news and the developments of the Gaza war, and of course the surfing of dealers and operators of Telegram channels on the emotional behavior of non-professional foreign exchange market activists, is the result of the strict implementation of the bank’s foreign exchange policy package. It is central in the form of stabilization policy.

However, reforming the currency structure of the country requires reforming the wrong and complicated laws, regulations and procedures related to currency. Therefore, the change in this structure, in addition to being time-consuming, along with liquidity control, inflation control, bank overdraft control and improvement of other effective economic variables, leads to the stabilization and predictability of the economy. In addition, with the approval of the new law of the central bank, while strengthening the preventive and supervisory tools, the authority of this bank to intervene and control the monetary and foreign exchange markets and to modify the structures has increased. However, the set of measures taken so far has been able to help improve economic indicators by creating an atmosphere of stability in the economy, and in the future we will see its effects on the lives of different sections of the society.

This report is a look at policy measures in the field of currency and its effects.

Forming a currency committee

By forming the foreign exchange committee and preparing the country’s foreign exchange budget for the first time in cooperation with the Ministries of Peace, Jihad-Agriculture and Health and Education, the Central Bank allocated foreign currency based on the priorities announced by these ministries.

Setting up a currency and gold exchange center

Setting up a currency and gold exchange center and transferring foreign exchange operations to this center is one of the most important actions of the central bank in order to eliminate intermediaries and shorten the process of currency allocation. This center started working with the aim of establishing currency price authority, increasing the volume of official transactions and ease of access for foreign exchange and gold market applicants, and in the near future, with the opening of the new building of this center, it will enter a new stage of its activity. In Iran’s Gold and Currency Exchange Center, the necessary sources of foreign exchange are provided through a transparent and legal process from the export locations of petrochemical, copper, mining, steel, oil refining, bitumen and other exporters in the currency remittance hall and are offered to importers for sale. The basis of the central bank’s policies and to predict the future for economic operators, new tools such as foreign exchange are used in the exchange center.

Establishing a currency stabilization fund

The currency stabilization fund prevents the excessive injection of foreign exchange reserves into the market and its possible exit from the country. Through the currency stabilization fund, the supply and demand of currency can be controlled by the central bank, and this issue prevents the false excitement and excitement of the market.

Update and modify regulations and processes

Reforming the travel currency allocation process: The way travel currencies are allocated was one of the factors that disrupted the currency market. To solve this problem, the central bank made the provision of travel currency subject to the presentation of a ticket and passing through the airport gate.

Amending import currency allocation regulations: In order to prevent the creation of fake and unrealistic currency requests for importing goods, the Central Bank decided to freeze the amount of currency in the bank account of the import applicant so that people do not receive currency on profit-seeking and unrealistic excuses. Also, people were required to open a foreign currency account in order to receive foreign currency with the national card, so that instead of receiving banknotes, a deposit is made to the foreign currency account.

Reducing the return period of export currency to 80 days

In recent years, the performance of large exporters in returning currency has been relatively favorable, but small companies have not performed acceptable in returning currency. Therefore, the return of export currencies to the economic cycle has always been one of the important issues and challenges of the currency field. Accordingly, the central bank, in continuation of the policy of stabilizing the foreign exchange market, reduced the return period of the export of some companies, including petrochemical, steel and refining companies, from 125 days to 80 days. In this case, the exporters are obliged to return the currency in a shorter time.

Strengthening monitoring and preventive tools

Emphasis on the preparation of foreign exchange balance sheets by banks: The Central Bank required the banking network to prepare foreign exchange balance sheets based on a base year and prepare the asset-liability statement and foreign exchange operations, in such a way that the total foreign exchange sales and purchases of foreign exchange branches and exchange offices are explained and currency audit Banks should be based on it.

Forming a committee to deal with monetary and foreign currency violations: Based on the central bank’s decision, a committee entitled to deal with monetary and foreign currency violations was formed with the presence of relevant institutions, including representatives of judicial authorities, economic security police, the Ministry of Information and other relevant institutions, to identify violators and Disruptors of the money and currency market should be acted upon.

Monitoring and continuous monitoring of the foreign exchange and gold market: monitoring and monitoring the foreign exchange and gold market is one of the continuous measures of the central bank to prevent false rate changes and the surfing of dealers in these markets.

Monitoring the activities of exchanges: while monitoring the activity of exchanges through on-site inspectors, the central bank uses the capacity of independent auditors to implement the audit of exchange companies based on the 4-layer defense standard, implement the rating system of exchange companies, create and announce uniform accounting coding, move towards Off-site monitoring based on financial systems monitors the performance and transactions of exchanges online.

Paying attention to the return of foreign currencies from exports

Use of incentive and punitive tools in order to fulfill exporters’ foreign exchange obligations: Obviously, one of the important goals of exports in the conditions of sanctions is to bring foreign currency to the country’s economic cycle in order to provide the currency needed for the import of goods, services and the implementation of the country’s infrastructure projects, as a result of non-return Foreign exchange causes capital outflow, disruption in the foreign exchange market, financing of goods smuggling and the like, and as a result, the management of the country’s foreign exchange reserves faces a crisis. Based on this, the central bank is trying to optimize the export and return process by monitoring the fulfillment of foreign exchange obligations of exporters and using the punitive and encouraging tools provided by the government.

Freeing the blocked currency resources: Previously, due to the sanctions, it was not possible to access the foreign currency resources of Iran, but the application of some policies led to the release of the blocked foreign currency resources in South Korea and Iraq.

Change in diplomacy

Development of economic relations with regional countries: Considering the importance of Iran’s role in the region, adopting active regional diplomacy in monetary and foreign exchange is one of the important programs that have been carried out in line with the currency stabilization policy. The improvement of Iran’s relations with the countries of the region and the expansion of commercial exchanges, followed by regional agreements, will lead to a decrease in the dependence of domestic financial markets on the West.

De-dollarization: In line with de-dollarization, the Central Bank has started the membership process in regional international organizations in cooperation with foreign diplomacy and is trying to create the necessary platform to reduce the country’s dependence on the dollar and the use of foreign currencies through bilateral and multilateral agreements. Provide another international currency or the currency of the countries of import origin.

Membership in BRICS: Iran joining BRICS will bring positive political and economic achievements and also lead to the strengthening of the national currency and decrease in the value of the dollar.

Trade development using the capacity of the Asian Exchange Union: The Asian Exchange Union was formed with the aim of reducing the need for dollars in currency exchanges between members, and the development of trade with regional countries within the context of the Asian Exchange Union reduces the dependence on dollars in transactions.

Using dinars instead of dollars to provide travel currency for Arbaeen: The successful experience of providing currency to Arbaeen Hosseini pilgrims can be considered one of the successful experiences of the Central Bank in the field of dollarization, so that during the Arbaeen Hosseini procession this year, instead of paying dollars to Arbaeen pilgrims to provide currency The pilgrims’ needs were paid in Iraqi dinars, and unlike previous years, the pilgrims’ currency was provided without any problems.

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