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Dollar On The Verge of Record High in Iran

IRAN -- Iranian and U.S. banknotes are on display at a currency exchange shop in downtown Tehran, April 4, 2015
IRAN -- Iranian and U.S. banknotes are on display at a currency exchange shop in downtown Tehran, April 4, 2015

Once again, the dollar's value has gained momentum against the Iranian national currency, the rial.

In another jump on Saturday, September 26, the dollar passed the 290,000 rials mark and sold for 29,3000 rials in the local open markets.

In late July, after a few critical days in the foreign exchange market, the price of the dollar reached about 250,000 rials. Shocked by the increase, the Iranian government rushed in and injected billions of dollars into the market. The dollar's soaring price paused for a while, falling to 210,000 rials.

Nevertheless, the pause proved to be temporary. In a few days, the dollar resumed its momentum upward.

In the last days of August, the dollar's value significantly rose against the rial's, reaching 280,000 in the early days of September. Once again, the dollar looked unstoppable.

Now, for the first time, the dollar is on the verge of an unprecedented 300,000 rials mark.

In recent months, the Central Bank of Iran (CBI) has repeatedly stepped in to control the dollar's price by injecting billions of hard currencies into the chaotic local exchange markets.

On Friday, August 7, the CBI Governor, Abdolnaser Hemmati, said that $2.5 billion in export revenues had been re-injected into the NIMA system [Persian acronym for Consolidated System of Forex Transactions] over the past ten days to control the turbulence in the market.

According to CBI statistics, during n the first four months of the current Iranian calendar year that started on March 21, the government had introduced around $5 billion to the system where importers procure their currency.

The CBI has always tried to control the forex market by injection of foreign currencies but in recent months due to the massive drop in Iran's oil sales, it has failed to prevent the devaluation of the national currency. According to Hemmati, over the past fifteen years, the CBI has injected around $280 billion, about $18 billion a year, to regulate the forex market.