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Rial Slips Again Against Dollar, Despite Gov’t Intervention

A close up shot shows Iranians trading money at a currency exchange office in a shopping centre in the capital Tehran. File photo

Iran’s national currency, the rial, continues its downward spiral, and is approaching 60,000 rials to the dollar.

Despite emergency intervention by President Hassan Rouhani’s administration setting an official range of 42,000 rials to the dollar, state-run Iran Labor News Agency reported May 1, “Each dollar was exchanged for 59,200 rials at the markets early today.”

Meanwhile, Fars news, a website affiliated with the Islamic Revolutionary Guards Corps, has not given the value of the dollar but reported the same day that the rial’s value against the euro was 71,000.

Furthermore, websites exclusively reporting on currency markets have been banned from publishing the actual rate at which the rial is trading.

With the rial hitting all-time lows, the government imposed an official exchange rate of 42,000 rials against the dollar April 9, set a cap on the amount of foreign currency citizens can hold in cash, and sent police to patrol exchange shops to crack down on under-the-table currency trading.

Speaking on state TV, Vice President Eshaq Jahangiri had cautioned at the time that trading at any level other than the official 42,000 rials to the dollar was forbidden and would be considered “smuggling.”

Rouhani's government deflected blame for the currency crisis to detractors at home and abroad. Government spokesman Mohammad Baqer Nobakht said April 10 that Iran was in an "economic war, and enemies seek to create problems for our economy."

Nevertheless, the governor of Iran's Central Bank, Valiollah Seif, got a dressing down from parliament last week, with many MPs demanding his resignation.

Rouhani’s administration decreed April 18 that all ministries, agencies, and offices of the government should use the euro for all foreign currency allocations.

Economists say the government’s strict measures aiming to control the value of rial have failed, as foreign currency exchangers are hoarding U.S. dollars and Iranians who require foreign currency for business or travel are defying the government and turning to the black market, where the rate of the rial against the dollar has skyrocketed.