Iran sets rial’s exchange rate to the dollar amid record low
TEHRAN, Iran — Iran moved on Tuesday to enforce a single exchange rate to the dollar, banning all unregulated trading after the country’s currency, the rial, hit an all-time low.
The country’s senior vice-president, Eshaq Jahangiri, was quoted by state TV as saying that the official “price of the U.S. dollar will be 42,000 rials as of Tuesday.”
He also said that trading at any other price was forbidden and would be considered as “smuggling.”
The decision came late Monday after a two-day hike in prices of foreign currencies that saw rial trading at 62,000 to the dollar — an 18 per cent drop since Saturday.
Government spokesman Mohammad Bagher Nobakht said Tuesday that Iran brings in some $95 billion a year in foreign currency, mostly from crude oil exports, which resumed after the 2015 nuclear deal. At the same time, $80 billion are spent on imports.
However, Iran remains largely cut off from international financial networks because of U.S. sanctions.
Rial’s slide is in part seen as stemming from fears the Trump administration will withdraw from the nuclear deal between Iran and world powers and impose new sanctions.
Head of Iran’s central bank, Valiollah Seif, appeared before parliament Tuesday to explain the measure, the semi-official Fars news agency reported. He was met with angry objections and interruptions from a group of lawmakers who briefly pushed him around on the podium and demanded his resignation.
Seif blamed price hikes on “lack of certainty” about the future and said “enemies know the issue and try to use any opportunity” to create trouble for Iran. He also referred to “traces of plotting” by regional Arab rivals, including Saudi Arabia and the United Arab Emirates, without elaborating.
“We are in an economic war and enemies seek to create problems for our economy,” said Nobakht.
Iran has long had trouble managing its currency market. In 2012, the government tried to set an official, single rate for the currency but the attempt failed.