Iran's currency collapses as central bank freezes foreign exchange
From Radio Farda
(Radio Free Europe / Radio Liberty, Washington)
Sunday, April 15, 2018
Iran's central bank has announced a ban on the sale of foreign currencies at exchange bureaus. Under new government guidelines, exchange bureaus no longer have the right to buy, sell, or transfer foreign currencies, and the central bank will no longer provide cash to the bureaus.
Mohammad Ali Karimi, head of public relations for the central bank, announced on state-run television on Friday that the guidelines aim to "redefine the job description of exchange bureaus," adding, "They might be given the role of a mediator for cases when Iranian banks are not interacting with some foreign banks."
The exchange rate of Iran's rial to the U.S. dollar is now officially set at 42,000. Karimi said exchange bureaus can sell dollars to banks at the new price. However, there are no dollars available at that rate and no one is willing to sell dollars at the arbitrarily set rate.
It would be a different matter if the central bank would make dollars widely available at the new official rate, but that would drain the state's dollar reserves, as companies and people would scoop up as much as possible because of their lack of trust for the local currency.
Previously, Iran's central bank would provide select exchange bureaus with between $50,000 and $100,000, which they were then allowed to sell at a profit of up to 15 percent.
According to the daily Qanoon, however, exchange bureaus are only allowed to buy or sell gold coins "until further notice."
Amid growing economic and political uncertainty, the rial has plummeted to a record low, dropping to an unprecedented level of 60,000 against the dollar on an emerging black market. ...
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