Central Bank of Iran Announces Launch of 'Secondary Currency Market'

Valiollah Seif, the Governor of the Central Bank of the Islamic Republic of Iran, announced the launch of the 'secondary currency market' starting Wednesday, July 4th. According to the state news agency IRNA, Seif stated that following efforts to organize the currency market, 'fortunately today (Wednesday) the secondary market has started its operations, with currency supplied from 20% of non-oil exports, which mainly includes the private sector and small items.' He mentioned that the exchange rate in this market will be determined through mutual agreement between importers and exporters, and the delivery of currency will not be physical (hand-to-hand). He explained that 'the process of the secondary market is such that the importer negotiates with the exporter, and by registering this agreement in the comprehensive trade system, this can be operationalized. In the next step, the importer visits the bank to obtain their statistical registration certificate and then finalizes their agreement with the relevant exporter. This agreement is also registered and operationalized in the comprehensive trade system.' Regarding the exchange rate in the secondary market, he stated that 'this rate will be based on supply and demand, and it will operate accordingly; however, currency exchange for other uses will gradually be transferred to the secondary market, but initially, it is dedicated to the import of goods and services.' According to reports from some Iranian media, the agreed rate is expected to be around 6,000 to 6,500 tomans. The official dollar rate announced by the Central Bank, which according to Iranian officials is only allocated for the import of 'vital and essential items,' is 4,277 tomans. Meanwhile, the dollar rate in the free market has recently approached 9,000 tomans. On Wednesday, the dollar price was about 8,100 tomans, indicating a relative decrease compared to previous days. The Governor of the Central Bank had also announced on July 4th that the currency for essential and vital goods would be supplied from oil sales at the official exchange rate by the Central Bank. The currency needed for the second group, which consists of essential goods, will be supplied from 80% of non-oil revenues and from the NIMA system (Integrated Foreign Exchange Transactions System), while the currency needed for the third priority will be supplied from 20% of non-oil goods, which is the same group that is set to operate at the agreed rate. In the past solar year, Iran's total non-oil exports amounted to 46 billion and 931 million dollars. In the first two months of this year, this figure has reached 7 billion and 739 million dollars, which is a 22% increase compared to the same period last year.