Map of central bank for dollars and coins
In a notice, the Central Bank published executive instructions on how to sell banknotes under the heading of meeting essential needs by depositing into the customer’s foreign currency bank account. Considering the change in the method of selling foreign currency in the form of bank notes under the heading of providing essential needs in the form of direct payment of bank notes to the applicant by depositing to the applicant’s foreign currency account with banks, the Central Bank has issued an instruction in 7 paragraphs. The most important issue in this instruction is having a currency deposit account by the applicant. Also, this foreign currency account must remain open for at least 6 months, and the minimum balance required for the continuation of the foreign currency account subject to this instruction will be 100 dollars or euros. Central Bank, on the other hand, announced the start of quarter coin transactions in the Iranian exchange center. Based on this, from Tuesday, the 15th of Farvardin, the trading of the gold coin of Rabah Bahar Azadi with the symbol “Quarter of Coin” started in the trading system of the Iran Currency and Gold Exchange Center, and natural persons can buy the quarter of a coin from today, that is, Wednesday, the 16th. In the month of April, refer to the member exchanges of Iran’s Gold and Currency Exchange Center that have purchased quarter coins from the center.
Payment of currency notes in the foreign currency account of the applicants
According to the report of the central bank, due to the change in the method of selling currency in the form of bills under the heading “Supply of essential needs” to direct payment of bills to the applicant by depositing into the applicant’s foreign currency account with banks, the executive instruction on how to sell banknotes under the heading of providing essential needs in 7 paragraphs announced. Based on this, all banks are obliged to sell and pay foreign currency for the purpose of providing essential needs in the form of banknotes, upon the request of the applicant, to open a foreign currency savings loan deposit account without obtaining an initial balance, in compliance with the relevant regulations. In the note of the first paragraph, it is stated that opening an account at the request of the applicant’s lawyer is not allowed. In the second paragraph of this instruction, it is stated that payment in the form of bank notes from the foreign currency account subject of this instruction is only possible to the owner of the (original) account.
According to the third paragraph of the new instructions of the Central Bank, the mentioned accounts will be only in dollar or euro currencies and with the origin of banknote and to be used for depositing the banknote subject to the provision of essential needs. In the fourth paragraph of this instruction, it is stated that the banknote can be withdrawn from the said account only after 5 working days have passed after the time of deposit to the foreign currency account of the applicant. After the mentioned period, the banks are obliged to pay the bills of the accounts of this instruction at any time according to the customer’s request. According to the fifth paragraph, the fee for withdrawal from the account in the form of bank notes is equal to 5% of the withdrawal amount.
Also, the exchange rate will be equal to the selling rate of dollar or euro bills in the electronic currency trading system plus one percent on the withdrawal day. According to the sixth paragraph, it is prohibited to receive any fee from the customer for providing the services that are the subject of this instruction, except for those specified in the instruction. Finally, in the seventh paragraph of this instruction, it is stated that the foreign currency account subject to this instruction must remain open for at least six months. In the note of this paragraph, it is also stated that the minimum balance required for the continuation of the foreign currency account subject to this instruction will be 100 dollars or euros.
The beginning of quarter coin trading in Iran exchange center
In another announcement, the Central Bank announced that since yesterday, the trading of the gold coin of Rabah Bahar Azadi with the symbol “Quarter Coin” has started in the trading system of the Iran Currency and Gold Exchange Center, and natural persons can buy the quarter coin from today, Wednesday, the 16th. In the month of April, refer to the member exchanges of Iran’s Gold and Currency Exchange Center that have purchased quarter coins from the center. Buyers of quarter coins from the exchange center will be only the brokers of this center, and the general public can buy quarter coins from member exchanges at the price published on the website of the Iranian Gold and Currency Exchange Center at the address www.ice.ir. According to Central Bank, all brokers who are members of Iran’s Gold and Currency Exchange Center, including banks, bank exchanges, and cooperative exchanges, have the option of buying quarter coins in this symbol. The supply of quarter coins is done only by the central bank. Therefore, there is no sales access for other brokers.
This report also states that anyone over the age of 18 can buy quarter coins only once a year. The noteworthy point of this report is that people who have previously bought a quarter of a coin from the Iran Commodity Exchange will not be able to buy a quarter of a coin again at the Iranian exchange center. On the other hand, the vice president of the market of the gold and currency exchange center has announced that every person with any national code can buy 5 pieces of quarter coins from exchanges in a year. Since yesterday, the first transactions to discover the price of a quarter coin were carried out in this market, and after discovering the price in the Iranian currency and gold exchange center, the sale price of a quarter coin will be announced to the people by the central bank and the exchange center, and the exchange offices are only allowed. sell the quarter coin to the applicants at this price.
Criticism of experts to the new system
It was March of last year that the Governor of Central Bank announced the opening of Iran’s currency and gold exchange center. The purpose of opening such a market was to facilitate the supply of currency and create a reference rate. In fact, in order to intervene in the free market and control prices in this informal market, the central bank has decided to intervene and organize this market by opening an exchange center. Officials of the central bank had also announced that the exchange rate in the Iranian currency and gold exchange center is determined based on the country’s foreign exchange resources and expenditures, as well as based on the fundamental variables of the country’s economy. Of course, economic experts criticized this way of buying and selling currency and gold. The most important criticism of economists in this way is the issue of artificial market creation. According to them, the central bank follows foreign exchange policies only through foreign exchange intervention.
In order to solve the foreign exchange problem of exporters and importers, the central bank should create a foreign exchange derivative market, so that with this method, the currency price risk for them will be greatly reduced. The issue of artificial market making has been pursued by monetary policymakers for decades and has always failed. Another issue that exists is that with the start of this center, any currency and gold transaction must be done in this market, and in this way, people who intend to invest in the currency and gold markets will face the problem of obtaining them. In fact, with this measure, the buying and selling of gold also becomes government, and therefore the possibility of creating a black market for currency and gold and creating long queues of applicants increases.
Source: World Economy