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Iranian Travelers Struggle To Buy Foreign Currencies Over Holiday

Iran's International Imam Khomeini Airport (IKIA) Arrival Terminal.
Iran's International Imam Khomeini Airport (IKIA) Arrival Terminal.

Banks at Tehran’s Imam Khomeini Airport are struggling to provide the foreign currencies paid for by passengers, who are forming long lines.

The shortage of foreign currencies worsened ahead of a three-day holiday that started on June 4 to mark the death of the founder of Iran’s Islamic Republic, Ayatollah Rouhollah Khomeini.

Many government employees and bank staff have gone on extended holidays, making the situation harder for passengers traveling abroad this week.

A decision by the government in April to limit the sale of foreign currencies to passengers had already made it more difficult to travel abroad. Banks are allowed to sell only up to 500 euros to those traveling to countries near Iran and up to 1,000 euros to those traveling to other countries -- and customers are only allowed to make an exchange once a year.

Anything beyond this quota must be bought on the open market, also called the black market, which is officially illegal but still operating.

The government’s measures to restrict the sale of foreign currencies stemmed from a free fall in the value of the Iranian currency, the rial.

On May 13, the government further limited the maximum amount that passengers are allowed to carry on departure from 10,000 to 5,000 euros. However, banks -- particularly those at the airport -- have been unable to keep up with demand.

Central Bank Governor Valiollah Seyf recently complained that “Iranians travel too much,” reported the Eskan News website, which follows economic developments in Iran. The report added that passengers face problems twice: once when they pay for a foreign currency at a bank in the city and again when they report to a bank at the airport to pick up the actual bank notes.

One passenger who managed to get bank notes wrote on Twitter that he had “received the currency in 500 euro notes,” an denomination difficult to change and uncomfortable to carry around, particularly in frequently visited destinations for Iranian passengers such as Tbilisi.

According to Eskan News, bank branches at the airport do not have enough of the right bank notes, possibly due to supply being limited through the Central Bank.

Iranians on social networks such as Telegram have reported that the rate of exchange on the black market in Tehran is as high as 65,000 rials per U.S. dollar and 75,000 rials against the euro. This means the rial has lost 100 percent of its value in less than a year.

The administration of President Hassan Rouhani insists the real price of the U.S. dollar in Iran is just over 42,000 rials, but this applies to transactions by a limited number of industrial and government customers. For travelers, the reality is limited supplies of hard currency or much higher rates on the black market.

Economic analysts have said measures like this cannot prevent the long-term devaluation of the rial.