Iranians are reportedly investing in gold after the Central Bank of Iran last week issued strict limits on the amount of foreign currency travelers can take out of the country amid a deepening currency crisis.
With exchange offices forbidden to sell foreign currency and new rules limiting the amount of foreign currency travelers can take out of the country to 5,000 euros ($5,980) if leaving by air and 2,000 euros ($2,392) if exiting by land or sea, gold has become the new currency of choice for people hoping to move their money out of the country.
Referring to the formation of a “new forex market,” the chairman of the Iran Gold & Jewelry Association, Hossain Pendarvand, says gold has replaced the dollar in local markets and that despite protective measures taken by the Central Bank of Iran (CBI), money is still finding its way out of the country, but now in the form of gold.
“The Gold products’ market is currently suffering from a recession, while the market for melted gold is flourishing, indicating that in the absence of the dollar, people have started buying more gold and taking it out of Iran,” Pendarvand told state-run Iran Students News Agency (ISNA) May 15.
After sliding for several weeks amid fears the U.S. would pull out of the nuclear deal, the Iranian rial hit an all-time low against the dollar after President Trump announced the withdrawal May 8. The next day, Iran’s national currency was trading on the black market for 75,000 rials to the dollar, despite the CBI having set an official rate of 42,000 rials to the dollar and a ban on exchange offices trading foreign currencies April.
In a sign of the severity of the crisis, Vice President Ishaq Jahangiri had said April 9 that anyone carrying more than 10,000 euros ($12,345) would be arrested.
Contradicting multiple reports of a parallel exchange market in gold appearing in the wake of the crisis, a board member with the Gold and Jewelry Trade Union, Mohammad Kashti Aray, has categorically denied that large amounts of gold are being taken out of the country.
Speaking to government-owned daily “Iran,” Kashti Aray said such stories are “baseless rumors.”
