ECONOMY

Iran lets money exchange houses import foreign bills as rial sinks

Iranian rials are seen at a currency exchange shop in Baghdad. (Reuters)

Iran gave permission to money exchange offices on Saturday to start importing foreign currency banknotes, state media reported, in an apparent attempt to stop the rial from plunging to a new low against the dollar.

Iran’s currency has lost about two-thirds of its value this year, hitting a record low earlier this week of 150,000 rial to the US dollar. It recovered to trade at 130,000 per dollar on Saturday in unofficial trade, according to the Bonbast.com currency market website.

The rial has been hit by a weak economy, financial difficulties at local banks and strong demand for safe-haven dollars among Iranians.

Many Iranians fear Washington’s pulling out of a 2015 nuclear deal and renewed US sanctions will cut into Iran’s exports of oil and other goods, which would likely put further pressure on the rial.

A set of US sanctions targeting Iran’s oil industry is due to take effect in November.

“Currency exchange offices have been given permission to import currency into the country and they can import currency in the form of bills,” central bank governor Abdolnaser Hemmati said, according to the Islamic Republic News Agency (IRNA).

Currency exchange offices will also be allowed to import gold, the head of the Iranian parliament’s economic committee, Mohammad Reza Pourebrahimi, said on Saturday, according to the Iranian Students’ News Agency (ISNA).

Imports of both gold and foreign currency by exchange offices were previously forbidden, Pourebrahimi said.

“In the past, this issue was forbidden and any kind of import would be considered contraband,” Pourebrahimi said.

Hemmati, who was appointed central bank governor in July in an ongoing shakeup of senior economic officials, made no mention of the decision on gold imports during his comments.

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Last Update: Saturday, 8 September 2018 KSA 21:05 - GMT 18:05
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