Iran Tries To Unify Exchange Rates To Halt Currency Decline

Iranian First Vice President Eshaq Jahangiri (file photo)

Iranian authorities have vowed to enforce a single exchange rate to the U.S. dollar in a bid to stop a slide that has seen Iran's rial currency fall by more than one-third in seven months.

Officials said that from April 10 on, the government will sell the dollar at a rate of 42,000 rials to all individuals and businesses, and asserted that "enemies" of Iran were behind the currency's decline.

Speaking late on April 9, after an emergency cabinet meeting, First Vice President Eshaq Jahangiri said the move will effectively unify Iran's official and open-market exchange rates.

Jahangiri said that trading at any other rate than 42,000 rials for a dollar will be considered "contraband" and will be dealt with "severely" by law enforcement.

The move came after the rial slid to 60,000 rials against the dollar on the unregulated market on April 9, according to media reports. The U.S. currency stood at 36,000 rials in mid-September.

The slide came amid speculation that the United States would pull out of the 2015 nuclear deal between Tehran and world powers in May. The agreement provided Iran with relief from sanctions in return for curbs on its nuclear program.

Jahangiri blamed "noneconomic, unjustified, and unpredictable factors" for driving the rial's collapse, saying tens of billions of dollars' worth of foreign currency had flowed into Iran in recent weeks from the country's export revenues.

"It's natural that our enemies and opponents, especially the Americans, after the nuclear deal was agreed and after [U.S. President Donald] Trump took office, have made great efforts to try and present Iran's economy as turbulent and try to discourage anyone from working with Iran," Jahangiri said.

Government spokesman Mohammad Baqer Nobakht said on April 10 that Iran brings in some $95 billion a year in foreign currency, mostly from crude-oil exports, while $80 billion are spent on imports.

"We are in an economic war and enemies seek to create problems for our economy," he said.

The governor of the central bank, Valiollah Seif, appeared before parliament on April 10 to explain the new measure to unify Iran's currency and control sales of the dollar, the semiofficial Fars news agency reported.

Seif blamed price hikes on "lack of certainty" about the future and said "enemies know the issue and try to use any opportunity" to create trouble for Iran.

He also referred to "traces of plotting" by regional rivals such as Saudi Arabia, without elaborating.

During his address, Seif was met with objections and interruptions from a group of lawmakers who stormed the podium.

Trump has threatened to pull the United States out of the nuclear agreement and reimpose sanctions on Iran in May unless new restrictions are placed on its atomic and missile programs.

Iranian President Hassan Rohani on April 9 warned that Washington "will regret it" if Washington violates the accord. https://www.rferl.org/a/iran-rohani-warns-us-violation-nuclear-accord/29154056.html

With reporting by Bloomberg, Reuters, AFP, AP, and dpa