Parliament's Vote on 'Prohibition of Currency Transactions Outside Authorized Exchanges' Denied

While on Wednesday news sources in Iran reported that the Islamic Consultative Assembly voted for a ban on the supply and sale of currency outside authorized exchanges, a member of the Economic Commission of the Parliament announced that the law concerning this issue has been removed from the Parliament's agenda and has not been approved. Reports published on Wednesday morning indicated that representatives, during the open session on October 3, opposed the removal of Article 23 of the bill to amend the law on combating smuggling of goods and currency, and mandated the Central Bank to take action to prevent and control the market for unauthorized currency transactions. The same report indicated that members of Parliament announced a prohibition on the buying and selling of currency by individuals and businesses outside the authorized units designated by the government. However, in the afternoon, the House of Parliament News Agency quoted Mohammad Hassan-Nejad, a member of the Economic Commission, stating that the bill to amend the law on combating smuggling of goods and currency has been removed from the agenda by the representatives, and thus 'the prohibition of buying and selling currency outside exchanges, as mentioned in some news agencies, is not accurate.' It is unclear why this bill was removed from the Parliament's agenda, and as of the time of this report, no new date has been set for reconsideration of the bill in Parliament. According to reports, the bill to amend the law on combating currency and goods smuggling includes provisions for determining and announcing the amount of currency that can be held and exchanged within the country, for travelers, for passing drivers, and similar cases, creating a financial information system for exchanges, and monitoring and evaluating their activities will be the responsibility of the Central Bank. The first clause of Article 23 of this bill mandates the government to provide the necessary currency for individuals and specifies that if the government is insufficient, it must create free currency exchange markets in such a way that individuals' demands for traveler and transit currency are met through legal means. According to the second clause of this bill, the supply and sale of currency outside the authorized units designated by the government by individuals and businesses is prohibited. This clause emphasizes that violators of this decision by Parliament will be dealt with according to the law, and the government will also determine the limits and regulations for the use of currency. The decision to amend the law on combating currency and goods smuggling came after widespread fluctuations in currency rates in Iran, which drew significant criticism from the government and led to the dismissal of the Minister of Economy and Finance of the twelfth government and the change of the Central Bank governor. Among others, Mohammad Reza Pourabrahimi, the head of the Economic Commission of Parliament, also criticized the Central Bank for 'not intervening in the currency market' in the past two months during an interview with Iran's Channel 2 on Tuesday night. According to him, for this reason, the powers of the Central Bank have been increased in the resolution of the Supreme Economic Coordination Council to take necessary actions in this regard. Mr. Pourabrahimi considered the 'intervention' of the Central Bank in liquidity management as one of the reasons for the recent decrease in currency rates and added: 'They had sidelined exchanges, but with the new management of the Central Bank, more powers were given to exchanges, and restrictions on transferring currency into the country were lifted, resulting in a large volume of currency entering the country.' Following reports of continued decreases in currency prices in Iran, the Central Bank on Tuesday, October 1, issued a statement asking all authorized banks to 'take action to buy currency from the public.' In its statement, referring to the public's willingness to sell their currencies and the refusal of currency brokers and exchanges to buy currency, the bank asked people to visit the currency branches of licensed banks to sell their currencies at the announced price. Jahangiri: Control of the Currency Market Will Continue Meanwhile, on Wednesday, Behrouz Namati, spokesperson for the Parliament's presiding board, also quoted Eshaq Jahangiri, the first vice president of Hassan Rouhani, stating that the government's control of the currency market will continue. According to Fars, Jahangiri mentioned this in a closed session of Parliament convened to discuss Iran's economic situation. According to Namati quoting Jahangiri, 'In the currency allocation committee, the needs of various currency groups have been met, and there is no discussion in this regard... Committees will provide the necessary currency for any subject they determine, and the necessary currency for controlling the currency market is available to the government, and the control of the currency market will continue.' Shahbaz Hasanpour Beiglari, a representative from Sirjan in Parliament, also told the Tasnim news agency that Jahangiri has reported on the 'complete provision' of currency needed for foodstuffs, medicine, tires, etc., adding: 'The currency market is being managed, and the trend of decreasing currency rates continues.' This news agency reported in another article titled 'Whose Power is Greater?' that despite the downward trend in currency prices in the market, brokers and some exchanges are resisting further price reductions. Tasnim also quoted economic experts stating that 'the publication of any news regarding the improvement of international political conditions and the lifting of sanctions will lead to a sharp decrease in currency prices.'