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Iran to Create Secondary Forex Market To Ease Dollar Crunch

Published 25/06/2018, 07:37 pm
© Reuters.  Iran to Create Secondary Forex Market To Ease Dollar Crunch

(Bloomberg) -- Iran plans to establish a secondary market for foreign exchange to help get around a dollar shortage that has hurt trade and is likely to worsen as U.S. sanctions resume.

The secondary market will allow exporters of non-oil commodities to sell their foreign currency earnings to importers of consumer products, the state-run IRNA news agency quoted Iranian Central Bank Governor Valiollah Seif as saying.

The introduction of a secondary foreign exchange market is the latest in a series of steps Iran has taken to reduce the impact of renewed sanctions on its economy.

Even before Donald Trump announced in May that the U.S. would be leaving the nuclear accord, Iran’s central bank imposed tight restrictions on foreign currency transactions in an effort to shut down a flourishing black market and halt a slump in the value of the rial against the dollar.

The Islamic Republic has also sought to wean its economy off the dollar by doing more trade in the euro and other currencies, though traders and analysts say that will not be enough to mitigate the impact of sanctions on its economy.

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