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Tehran to tackle currency woes with new forex

Iran plans to launch a new integrated foreign exchange market to tame hard-currency volatility, though that goal is far from assured.
EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran.

A woman looks at exchange rates by the window of a currency exchange shop in Tehran's business district January 7, 2012. REUTERS/Raheb Homavandi  (IRAN - Tags: BUSINESS) - GM1E8171GYK01

Extreme foreign exchange-market fluctuations are highly likely to continue to menace Iran’s national currency, the rial, and the Iranian economy.

new integrated foreign exchange market is in the works to meet this challenge. NIMA, the state-run secondary foreign exchange market launched just over a year ago, hasn’t brought about the intended results for the Iranian economy due to the Central Bank of Iran’s weak regulatory oversight. Nevertheless, the CBI claims that this newly designed currency market will be more effective and marginalize middlemen, whose speculatory activities have largely contributed to the rial’s devaluation at times of economic and political crises.

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