Amid US sanctions, coronavirus outbreak, Iran central bank injects cash to lift rial

Iran’s Central Bank has injected hundreds of millions of dollars to stabilize the currency market, bank governor Abdolnaser Hemmati said on Saturday, after the Iranian currency fell to historic lows this week.

“Over the past few days, hundreds of millions of dollars entered the market through (Central Bank-linked) brokers and thwarted many of the plans of those trying to destabilize the foreign exchange market,” Hemmati said in an Instagram posting.

The rial currency sank to its lowest-ever level on Tuesday before recovering slightly. It has been under pressure from US sanctions and the coronavirus crisis.

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After saying on Friday that the central bank would not “'spray' its resources onto the market,” Hemmati said that he did not mean the bank would hold back from supporting the ailing rial.

“Our market intervention will be prudent and goal-oriented,” he said.

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Iranian officials have said in the past that they have largely abandoned a policy of injecting large amounts of hard currency to support the rial since 2018, when it lost about 75 percent of its value after the United States withdrew from a nuclear deal and re-imposed sanctions.

The rial was trading at around 200,000 per US dollar on the unofficial market on Saturday, according to foreign exchange websites including Bonbast.com.

The currency gained slightly against the US dollar earlier, trading at around 192,000 per dollar on Friday, after falling to a historic low of 205,000 on Tuesday.

The official exchange rate is 42,000 rials per dollar and is used mostly for imports of state-subsidized food and medicine.

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