ECONOMY

Crash of Iran’s riyal forces traders to stop selling foreign currencies

The price of one dollar now exceeds 41,000 Iranian riyals, which has caused panic and confusion in Tehran’s black market. (Supplied)

According to Iranian agencies, the black currency market in Tehran has stopped the selling and buying of foreign currencies because of a sharp rise in the price of the US dollar, the euro and the pound to levels that existed before the nuclear agreement was reached.

Financial websites, mainly Al Mithquaal, report that the price of one dollar now exceeds 41,000 Iranian riyals, which has caused panic and confusion in Tehran’s black market where exchange offices have stopped buying and selling dollar and foreign currencies.

Some analysts believe that the announcement of the budget deficit in the first half of the current Iranian year and the circulation of reports on “manipulation of the foreign exchange market to compensate for a portion of the budgetary deficit” have led to a rise in price of the US dollar and the of other foreign currencies against the Iranian riyal. 

New US sanctions 

The head of Iran’s Central Bank, Ouialiullah Saif, has attributed the rise in foreign currency prices against the riyal to new US sanctions against Tehran. Washington imposed sanctions on Iranian entities and personalities linked to the Iranian Revolutionary Guards after Donald Trump announced his new policy vis-à-vis the regime in Tehran on October 13.

The current discussion is about the price of the Iranian currency and the possibility of it collapsing against the dollar as was the case before the nuclear agreement. The Iranian riyal keeps crashing against foreign currencies and has dropped to an unprecedented level in recent months.

The price of gold in Iran has risen to unprecedented levels over the past two years, where the price of a so-called full gold bar is reportedly worth 10,400,000 riyals.

Economists had expected the nuclear agreement between Tehran and the six big powers to have a positive effect on Iran’s markets, but it had little impact on the Iranian economy which suffers from corruption and mismanagement. The situation has worsened in light of President Trump’s opposition to the nuclear deal which he described as “bad” and “stupid”.

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Last Update: Thursday, 16 November 2017 KSA 20:25 - GMT 17:25
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