Iran Central Bank tries to contain drop in value of rial

A senior official of Iran’s Central Bank, Mohsen Abbasi, threatened Iranian currency traders with loss of their trading licence if they continue blocking trade.

The recent extreme fluctuations in the exchange rate of foreign currency in Iran have led traders to refrain from selling their foreign currencies.

Abbasi told ISNA that Tehran’s currency traders bought the US dollar at 10,750 rials yesterday and traded it at 10,800 rials. He added that all banks also had an inspector to supervise the distribution of the foreign currency.”

He added that by tomorrow the dollar will fall between 500 to 1000 rials.

Last week the dollar surged to 12,000 rials despite the Central Bank’s announcement that it would be traded at 10,200 rials. People are reportedly lining up in long queues to buy foreign currency.

The Central Bank then began offering the dollar at 10,700 rials two days ago to control the value of the rial. While this reduced the exchange rate for the dollar, traders have not yet returned to business as usual.

Mahmoud Bahmani, executive director of the Central Bank announced last week that the exchange rate of the US dollar will go down to 10,600 rials. However, Hamid Pourmohammadi, deputy of the Central Bank stressed that while we cannot exactly predict the rate of exchange, the surge in the dollar has been contained so far and in the coming days, the dollar will stay at 10,500 rials.