Iran is planning to establish a foreign investment fund to help regulate its informal currency market and consolidate foreign currency resources. At present, individuals cannot open cash-based foreign currency accounts at banks, and banks only charge for safekeeping. In response to these constraints, the government is introducing a new policy to attract foreign currencies and cash held by the public, converting them into remittances through this investment fund. This shift reflects a focus on remittance flows rather than physical currency.
Key Objectives:
- Primary Goal: The fund will first address the Central Bank’s foreign currency needs.
- Secondary Goal: Once the Central Bank’s needs are met, the remaining funds will be funneled into the broader market to support the country’s production sectors and drive economic growth.
- Innovation: A major feature of the fund is allowing the public to invest in foreign currency Murabaha bonds. This will require close coordination and a bilateral agreement between the Securities and Exchange Organization and the Central Bank of the Islamic Republic of Iran.
