US dollar likely to register historic record in Iran

Business Materials 28 November 2015 13:22 (UTC +04:00)

Baku, Azerbaijan, Nov. 28

By Umid Niayesh- Trend:

The rising trend of US dollar will continue in Iran, an Iranian expert said, forecasting that it will most likely hit 40,000 rials in the free market by March 2016.

The currency market did not show a positive reaction to the nuclear agreement signed last July, Mohammad Reza Sabzalipour, head of Iran's World Trade Center, told Trend.

While the US price was expected to fall in the market, it went to significant increase, making the foreign currency market insecure, he said.

Speaking about the reasons behind the dollar rise, according to Sabzalipour, there are plenty:

- remaining sanctions
- embargo on oil exports
- Iran's assets still frozen
- huge fall in global oil prices
- importers' demand for foreign currency
- Central Bank injecting market with high-priced US dollars to compensate for the current year's budget deficit

Sabzalipour accused the Islamic Republic's Central Bank of mismanaging the issue.

He further forecasted that if the nuclear deal implementation faces problems which likely to happen, the USD will surpass 40,000 rials by end of current Iranian fiscal year (March 21, 2016).

Iran's national currency, the rial, lost about 50 percent of its foreign exchange value in less than a week in October 2012, standing at 35,500 versus the US dollar. It was close to 10,000 in early 2011.

The July 14 agreement on Iran's nuclear program had lowered the prices to some extent. On the very day the deal was struck, the US dollar went as low as 31,800 rials, only to jump to 32,450 the next day.

The rising trend of US dollar continues in Iran's free market as the US currency sold at 35,800 rials on Nov. 26.

The Central Bank of Iran has put the official rate of US dollar, at 30,071 rials on Nov. 28, compared to 30,027 compared to preceding day.