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IME in a Position to Run Futures Market on Foreign Currencies

Iran Mercantile Exchange has the potential to launch futures contracts on foreign currencies in order for market participants in need of risk coverage to manage risks imposed by volatility in foreign currency exchange rates, Hamded Soltaninejad; IME CEO was quoted as saying by Kala Khabar.
 IME in a Position to Run Futures Market on Foreign Currencies

He continued that in critical times when there is a huge demand for foreign currencies, such a market can mitigate the consequent risks caused by price volatility.

He added that in various countries over the world such as China, Turkey, and Russia, exchanges are operating derivatives markets on foreign currencies to help market participants cover such risks.

IME CEO insisted that another advantage of establishing such a market would be absorbing foreign capitals. A futures market on foreign currencies could relieve foreign investors' concerns as to severe price fluctuations of rials against other currencies.

Pointing to IME's derivatives market trading value in the Hijri year 96, 21March 2017, 21 March 2018, which stood at 600,000 billion rials, Soltaninejad believes that IME is now fit to launch the same market for foreign currencies as well.

Soltaninejad explained that derivatives markets have been established for even local currencies for countries with large volumes of transactions with one another like Russia and Turkey.

To answer the question that why this market has not been launched yet, Hamed Soltaninejad said that according to Iran's Central Bank, establishing such a market is subject to some pre-requisites like a unified exchange rate for foreign currencies as well as launching the interbank foreign currency exchange system, the lack of which have prevented us from moving forward in this regard. Yet, some countries have initiated their derivatives market for foreign currencies in spite of such problems.

 Anyhow, Soltaninejad added that no matter what institution will carry out the job, we hope we will be witnessing a strong derivatives market on foreign currencies in our country in the near future and IME is ready to do everything in its power to push this project ahead.

Author: IME International Affairs & PR

ID: 50059484

Published on: Sunday, April 15, 2018 14:30

Source: IME

View count: 3

Friday, April 27, 2018 09:28

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