Central Bank of Iran’s New Circular on Sales and Purchase of Foreign Currencies

On Thursday 16th June 2022, Central Bank of Iran (CBI) issued an important circular introducing new conditions for sales and purchase of foreign currency by licensed exchanged offices. This change is targeting regulating the exchange market in a more efficient manner, said CBI. This circular allows exchange offices to purchase foreign currency from all natural and legal persons at mutually agreed rates in addition to exporters’ foreign currencies.

It appears that by this move, CBI intends to open new doors to the inflow of foreign currencies. As said by Mr. Kamran Soltanizadeh, the Security General of Iran Exchange Offices Association to Tasnim News Agency, CBI’s circular can “significantly increase supply of foreign currencies to the market”. He also added “the recent decrease in foreign currency rates by more than IRR 20000 can continue over the course of next days.”

In another statement by Mr. Lame’ei, CBI’s Head of Export Department “all natural and legal persons can bring foreign currency notes into Iran and without any limitation”. According to him, everyone can bring foreign currency notes into the country after declaration at customs and they can benefit from a tax exemption.

This decision can result in expansion of sales of foreign currencies by authorized exchange offices. Mr. Saleh Abadi Head of CBI announced on Sunday 12th June that sales of foreign currencies by exchange office to individuals will be with no limitations. He had also mentioned that “we will be working on [the plan] that CBI will not be the only purchaser of foreign currencies and governmental banks should also be able to sell foreign currencies to and collect Rials from the market.”

This decision may also result in boosting export appetite in Iran because price of imported foreign currencies will no longer be mandated by the government and can be “agreed”.