Central Bank Seeks to Eliminate Currency Exchange Association; Exchanges to Become Part of 'Exchange Center'

After much back-and-forth and the Central Bank's agenda to dissolve the Currency Exchange Association, the bank's currency deputy has announced a new plan for exchanges, stating that the development of the business model for exchanges using the capacities of the currency and gold exchange center is on the Central Bank's agenda. Mohammad Aram emphasized that members of the exchange center will be bank and mutual exchanges, as the activities of exchanges had previously focused solely on physical banknotes. Soon, licenses for activities in the area of gold coins, gold bars, and other precious metals, including silver, will be added to the activities of exchanges. He pointed out recent controversies regarding the Currency Exchange Association, stressing that the professional body representing the exchange community should not take actions contrary to the country's official currency policy. The Central Bank's new approach to exchanges comes after it revoked the license of the Currency Exchange Association on August 1, citing 'violations and deviations' by the association. In response, the Currency Exchange Association stated that the Central Bank lacks legal authority to dissolve the association. Consequently, tensions between the Central Bank and the Currency Exchange Association have caused the rate of one US dollar in the free market in Iran to exceed 50,000 tomans once again. The Currency Exchange Association, however, considers the dissolution of the association to be under the jurisdiction of the 'General Assembly' and stated that it does not need the Central Bank's permission to hold a General Assembly. This professional body also described the portrayal of exchanges as responsible for the increase in currency prices as a 'worn-out tactic' and announced that in the past year, 'half of the licensed exchanges have closed down.' The dissolution of the Currency Exchange Association occurred after Kamran Soltani-Zadeh, the secretary of this association, reported on August 1 about the 'seven-rate dollar' in the currency market and stated that the Central Bank of the Islamic Republic is 'officially intervening in four neighboring countries.'