Mahdi Darabi, the currency assistant to the Governor of the Central Bank, elaborated on the currency policies of this institution and the logic behind the buying and selling of currency in an interview. He pointed out that criticisms of the Central Bank regarding excess currency purchases and the failure to reduce currency rates stem from a lack of understanding of the mechanisms of the official currency market.
Mechanisms of the Currency Market and Central Bank Interventions
Darabi explained: "Since 2018, due to currency fluctuations, controls have been imposed on the official currency market. Not every importer can access the official currency market at any time, and the provision of import currency is completely controlled." He added that under these conditions, the Central Bank purchases excess currency supply on specific days and supplies currency on days when there is a shortfall. According to him, this process helps create uniformity in the currency market.
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He referred to examples of changes in currency demand and supply in the market and said: "Before January 2025, demand in the commercial currency market reached about $600 million per day, while currency supply was limited to $50 to $60 million. However, after policy reforms, demand decreased to less than $100 million, and currency supply increased to over $300 million per day."
Sources of Currency Purchases and Increasing Reserves
Darabi further mentioned the sources of the Central Bank's currency purchases and said: "One of the sources for our purchases is the government's oil currencies. The government sells its oil currencies to the Central Bank, which intervenes based on the supply shortfall in the market. When the currency market is balanced, there is no need to sell foreign exchange reserves." He also explained that part of the increase in reserves is due to the purchase of oil currencies and emphasized that the Central Bank has been a net seller since January and everything it has purchased has been sold in subsequent days.
In response to criticisms that the Central Bank buys currency at a low rate and then sells it at a higher rate, Darabi rejected this claim and called it "media mischief." He explained that the Central Bank divides its transactions into three parts and emphasized that the institution's goal is to ensure balance in the currency market and prevent severe fluctuations.
According to Darabi, "The Central Bank must maintain a standard level of cash reserves, and these reserves are essential not only for market intervention but also for meeting domestic needs." He also stated that the increase in cash reserves is due to the return of export earnings, and this process helps maintain balance in the currency market.
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