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New blow to rial as US dollar hits new record against Iran's currency

Business Materials 3 September 2018 16:45

Tehran, Iran, Sept. 3

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The US dollar jumped to as much as 129,000 rials in the open market in the Iranian capital city of Tehran on Monday.

According to reports by Iranian media outlets, a US dollar and the euro, respectively, traded for 129,000 and 149,000 rials in the open market in the afternoon on Monday, Sept. 3.

A US dollar was worth 36,000 rials in mid-September last year.

One of the main reasons behind the recent fluctuations in Iran’s foreign exchange market is due to US President Donald Trump’s withdrawal from the 2015 nuclear deal between Tehran and world powers in May and the re-imposition of new sanctions.

The Trump administration has warned of consequences for countries including European allies that co-signed the nuclear accord, that do not respect the new sanctions.

On concerns over a return of sanctions, the rial plunged to an all-time low on April 9. In an attempt to stop the fall, the administration of President Hassan Rouhani held an emergency meeting and decided to unify the country’s official and open market exchange rates.

Following the meeting, the government announced the price of the dollar would be 42,000 rials in both markets, and for all business activities.

After the protective policy by the government failed to control the prices in the market, the government launched a secondary currency market.

The market again failed to help the government and the administration decided to introduce a new chief for the country’s central bank.

Abdonasser Hemati, the new head of the central bank, made some changes and allowed licensed exchange offices to buy and sell US dollars and announced that trading the US dollars was no longer considered smuggling.

According to the report, the gold coin bubble in Tehran's market was also inflated with gold coin registering a rise of 5,000,000 rials and selling for 46 million rials.

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