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As Dollar Rises In Iran Police Arrest 20 Currency Dealers

A currency dealer in Tehran counting rial banknotes. File photo

Police chief of Greater Tehran has announced Tuesday the arrest of “twenty foreign currency dealers”, as the U.S. dollar makes more gains on the local market.

Hossein Karimi reiterated that more than 190 currency dealers currently are in jail, saying that all “unauthorized” currency exchange bureaus have been shut down. He also threatened all those who engage in currency trade on social media and announce “inflated rates”.

The Iranian currency rial, which last year took a nosedive against major currencies had recovered some of its losses by the end of 2018, but once again has lost 30 percent value since January. On Tuesday, the rial dropped to 133,500 to the dollar. In December it was around 100,000 against the dollar.

Market observers say uncertainty in Iran’s foreign political and economic relations have played a major role in recent days to drag the national currency lower. The European Union has offered Iran a trade mechanism to avoid U.S. sanctions, but Iran has failed to adopt financial laws demanded by an international watchdog, the Financial Action Task Force.

The Islamic Republic arrested many traders in 2018 at the most chaotic time for the national currency and along with banking interventions was able to control the currency market for a while.

On November 14, Iran hanged two gold traders, as a message to others to tow the line and abide by mandated exchange rates.