What are the four functions of the currency and gold exchange market for dollar pricing?
According to the report of Iran Economist, Mohammad Reza Farzin was elected as the new head of the Central Bank on January 8, 1401 and after the increase of turbulence in the currency market, but Farzin on January 10 and only 2 days after being appointed as the head of the Central Bank in Television appeared and announced its plans to control the currency market.
Currency and gold exchange market is the biggest promise of Farzin
According to Farzin, the problem that exists in the Nima system is that there is a lack of coordination between the currency and commercial maps, and this causes the required currency not to reach the traders and merchants properly, and to solve this problem, the currency exchange market that creates We will provide all non-commercial currencies consisting of 40 types of needs, which will be based on supply and demand.
As the head of the central bank says, in the exchange market, the new system will see the foreign exchange needs of the people and they will be paid in foreign currency based on the people’s documents.
Mostafa Qamari Wafa, the spokesperson of the central bank, also explained the details of the foreign exchange market and said: The system of Iran’s foreign exchange service management system (Nakhoda) will be launched within the reach of the currency and gold exchange market in the next 2 weeks. In this market, not only banknotes are offered in the form of currency, but also non-commercial foreign exchange needs through the Iranian Foreign Exchange Service Management System (Nakhoda), which includes 38 foreign exchange expenses. Ganeh It is a service that will be provided.
According to Mehr, one of the constant problems in the Nima system is the difference between the remittance dollar and banknote dollar rates, which has caused the dollar to remain at multiple rates. The free market is formed within the Nakhada system and the exchange market.
How to discover the dollar price in the exchange market
According to Mehr, the Central Bank as market maker He plans to discover the price of the dollar in the exchange market five times a day by registering a book order, and this price is the basis for the pricing of exchanges, and practically the free market price is formed in the exchange market.
The fourfold function of the currency and gold exchange market
According to Mehr’s information, the currency and gold exchange market has four functions, banknote transaction, gold transaction, small remittance transaction, agreed remittance transaction for industries and companies, and with these four functions, it can price the market correctly.
agreed dollar; A solution that could not manage the fluctuations of the free market dollar
The agreement dollar initiative, although it has a good initiative to supply currency by many export companies, both industrial and mining, but this market could not manage the free market as it should, and after a while, this market separated its way from the free market and practically the dollar Several rates were formed, including the Nima dollar, the agreed dollar, and the free market dollar. The multiple exchange rate of the dollar can cause a lot of damage to export-oriented companies, and on the other hand, due to its multifaceted nature, it makes financial analysis of various industries difficult and companies have trouble predicting the future, including profitability and even operating costs.
Of course, during the short term of Mohammad Reza Farzin’s management, the central bank has taken a positive step, and that is to bring the agreed dollar rate closer to the free market dollar, which can encourage many exporters to supply dollars in the agreed market, but as the general manager The central bank says that the main plan of the central bank is to focus on the exchange market and the captain system, and the consensus market will disappear soon.
The heavy rumor of the lack of foreign exchange reserves and the impact on the free market, which was denied
One of the things that caused the dollar to face a significant growth in the free market and move above the 40 thousand toman mark is the heavy rumor of the lack of foreign currency reserves of Iran due to the US sanctions, but Farzin did not accept this issue and to refute it, He gives the argument: “The 9-month statistics of the Central Bank show that the country’s goods account means exports.” Minus Imports have been positive by 20 billion and 500 million dollars; This means that we have exported more than imported. Our export amount was 73.4 billion dollars, which has grown by 31%. While our import was 52.9 billion dollars, which has grown by 19.6%. This has caused the country’s foreign exchange reserves to increase by 20 billion and 500 million dollars due to exports exceeding imports, and these reserves are now available to us, and we have no problem in meeting the country’s foreign exchange needs to supply goods.
In his television interview on Sunday night, Farzin also spoke about the central bank’s efforts to recruit new sources of currency and stated: “The first thing we did was constructive business negotiations with our country’s business partners in the form of monetary and banking diplomacy. During this period, we had very productive negotiations with Qatar, the United Arab Emirates, China and Iraq, and we had very good achievements in all of them. So that a large part of Iran’s sanctioned and blocked currency resources can be used and we are using it now. For example, from Saturday of this week, we were able to supply about 300 million dollars of the total 10 billion dollars of TBI currency resources that we had in Iraq in the Nima market for basic goods, and from now on we will offer this currency in the Nima market and all Importers can use it. The currencies we had in China were not usually sold in Nima, but now they are sold in Nima, and we reduced the allocation time, which used to take about 21 days, to 48 hours. We were also able to increase the supply of dirhams in the Nima system in the very constructive negotiations we had with the Emiratis.
If the central bank can offer a part of the dollars from the sale of oil and the sale of export companies, including petrochemical, industrial, mining and agriculture, in the exchange market, this issue can turn the exchange market into a market accessible to people, exporters and importers, and practically the free market. Farzin in his two conversations
The problem of smuggling goods and free dollars
One of the constant problems and obstacles of the central bank for not succeeding in controlling the free market is the problem of smuggling goods, in the smuggling of goods that mostly occurs with free market dollars.
According to Ali Muwaidi Khorramabadi, head of the headquarters for combating goods and currency smuggling, goods smuggling includes one fifth of Iran’s trade, and with research in this load We hope that we can maximize the fight against smuggling of goods and currency and minimize the smuggling of goods.
The anti-trafficking and goods headquarters has changed its actions from a police issue to a research and basic science issue and in this load It has been coordinated with various governmental institutions and the private sector in order to minimize the volume of smuggled goods.
According to some studies, the annual volume of smuggling into the country is 15 billion dollars and this has boosted the free market dollar transactions, of course, the only way to combat smuggling is to systematize the economy by implementing a comprehensive trade system that transports goods from origin to destination. The hand of the retail customer has been intercepted and practically, in this way, contraband goods can disappear from Iran’s economy forever.
Of course, the above tasks are the responsibility of other institutions, but at the same time as the Central Bank implements the anti-trafficking law, it can become a free market rate maker by bringing its exchange and free market closer together.
Do monetary policies work?
In his TV interview, Farzin spoke about monetary policies and interest rates to control the currency market, it seems that this issue cannot affect the exchange rate as much, because the government cannot increase the bank interest rate without restraint because this increase increase dissatisfaction Banks and monetary base will increase in the coming years, and on the other hand, due to the high interest rate in the country, it is not possible to seriously increase the interest rate in such a way that it can increase the strength of the rial, and Farzin has implicitly accepted this issue and in this load He said: “The duty of the central bank is to maintain the value of the currency and control inflation, but today it is not possible only by the central bank and monetary policies.”
Focus on fiscal policies
One of the positive actions of the government is to focus on financial policies to manage inflation and the monetary base, of course these actions have not yet reached the desired result, but the beginning of this process can have many results on the country’s economy in the future, the central bank also supports this issue. focused on increasing the financial discipline of banks and eliminating dissatisfaction Banks prevent the increase of the monetary base and inflation in this way.
Legal speculation is a solution for investing in currency
The word speculation has acquired a negative meaning in Iran, but the truth is that governments The world has not ignored this issue and always has a way to speculate or fluctuate get A part of the people have opened the law in some markets, but the point is that in consumer markets such as housing and cars, any speculation is dealt with by strict tax policies, for example, the stock market is one of the speculative markets. open It is in the world that it involves some people due to some strange profits, but this type of promissory markets Open As they have strange profits, they also cause strange losses to their investors. But in Iran, the economic authorities have legally prevented speculation for years, and this economic policy has had the opposite result and turned all the consumer markets of the Iranian economy into speculation markets. Open has done.
In the global market forexMany currency pairs such as euro to dollar, pound to dollar, dollar to yen, dollar to Swiss franc, etc. are exchanged and the value of the world’s most important currencies is determined in this market. policies economic and economic progress of a country and only the result of supply and demand in the market forex No, but the important point is that promissory note investment Open In this market, it has been recognized for many retail investors in the world
The new and important point that the Governor of the Central Bank mentioned in his Sunday remarks is the creation of markets like bazaar forex It was for the Iranian rial, which can be used as a promissory note Open To cover the currency, Farzin in this load He said: “Currently, the atmosphere is emotional, and for this reason, we are trying to solve all the needs in this market, and after that, we will use other tools that are used in the world’s currency markets. In this market, we are looking for ways to use tools like swap, forward And Futures to be used. But these actions will be postponed to the future and we are currently looking for stability in the market.”
Quick way to control currency
As mentioned above, maintaining the value of the national currency requires numerous governmental measures and a multifaceted and comprehensive plan must be designed and formulated for it, but in the short term and to control the current market situation, it is possible to invest in increasing the depth of the currency exchange market. took it seriously and established peace in the free dollar market by developing the exchange market and controlling the reins of the free market dollar.