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Iran's local currency hit a new all-time low against the US dollar on Monday, prolonging a historic slide on concerns over new US sanctions that should be imposed next week.
promised new measures to restore calm. He did not say what those measures were, but they will likely be the first major moves for the new central bank governor, Abdolnaser Hemmati.
The rial was traded Monday at 119,000 US dollars, according to Bonbast, who tracks unofficial currencies. -the market rates. The currency fell $ 100,000 per dollar for the first time on Sunday and has almost halved since early May.
The slump in the currency and surging demand for gold were "not commensurate with economic realities," according to the central bank.
New US sanctions are expected to come into effect on August 6, covering trade in gold and other precious metals from Iran, its purchases of dollars, metals, software and its sector automobile fueled uncertainty and investor flight to safety. Sanctions against Iran's oil and maritime industries scheduled for November
Sanctions follow President Trump's withdrawal from the Iranian nuclear deal on May 8th. This agreement, concluded between Iran and six world powers in 2015, allowed Iran to evade international sanctions. in exchange for the reduction of its disputed nuclear program. The Trump administration considered the deal as inadequate because it did not prevent Iran from extending its military footprint in the Middle East.
Iran has already tried a whole series of measures to stem the currency crisis. In April, the Iranian authorities announced that the rial would trade at $ 42,000 and make it illegal for anyone to trade outside the official rate. In July, Iran opened a second foreign exchange market for importers of non-essential goods that are not eligible for the central bank's prime rate, which is currently in the range of 44,000 rials to the dollar. . However, the secondary market did not result in strengthening the currency.
Meanwhile, the huge gap between official and market rates has spurred cheating and led to accusations that people closely linked to the regime are taking advantage of the situation.
Authorities have arrested dozens of people in recent days for what an Iranian judiciary spokesman termed "economic disruption" on Monday. Some have been accused of buying ordinary Iranian identity cards and using them in rigged commercial transactions allowing them to receive dollars from the central bank at prime rate.
The crisis comes at a difficult time for Iran's leaders. While the weakening of the currency is often blamed on corruption and speculation, Iran is also struggling with rapidly rising prices for meat, medicine and other products. which have had a greater impact on ordinary Iranians. December and January, centered on the economic management of President Hbadan Rouhani. Traders in Tehran's old market, the Grand Bazaar, closed their shops in protest in June as conditions worsened.
Write to Asa Fitch at [email protected]
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