The Iranian Association of Islamic Finance (IAIF) held a specialized session on “The Role of the Mercantile Exchange in Production Growth and Inflation Control” on January 9, 2024 in the presence of Dr. Mohammad Hossein Rahmati, Head of Market Development and Economic Studies at the Mercantile Exchange, Dr. Mohammad Nadali, General Manager of Monetary and Credit Operations at the Central Bank of Iran and Dr. Mohammad Eskandari, Capital Market Expert. Dr. Seyed Ali Hosseini, Member of the board of directors at IAIF hosted the session.

At the beginning of the session, Dr. Rahmati explained the conditions of the mercantile exchange in the first 9 months, stating that 95% of the mercantile exchange’s trade is related to physical transactions, of which 60% belongs to industrial and mineral goods.
He added, in fair transactions, transparency is the first positive feature for analysts and traders. Moreover, through the transparency, policy makers can identify bottlenecks to determine the price of goods. The second advantage is the access to transactions for wholesalers and retailers, and the third one is the guarantee of transactions. All these merits have been considered in the mercantile exchange.

Dr. Hosseini emphasized that by considering the resources that stock market access and use them, there is complete infrastructure for an efficient market. Governments should be aware of these funds and use these infrastructures well. Hence with the formation of the mercantile exchange: 1. the data is well available. 2. Legal and illegal information rents are decreased. 3. Collection of claims is done easily. 4. Obligation and guarantees are done firmly
As to the mercantile exchange, Dr. Nadali mentioned the mercantile exchange is a place where goods are exchanged and it is different from the stock exchange. If there is any criticism, it is on innovation and financial instruments.

From the point of view of production, the set of economic and practical activities that affect the stock market and create more stability has a greater role on production.
Then Dr. Esfandiari said the commodity exchange has 2 markets: 1. physical market 2. derivative market
At the end, Dr. Hosseini emphasized that the commodities exchanges has made enough headway in India, China, and Brazil and have a high production capacity. He reiterated that it is important the strength point of the Iran Mercantile Exchange is not only financial arm without physical support. Because if it were only a financial arm without physical support, it would have lack of shariah compliance.