Iran fixes dollar rate to stop rial collapse

Iran fixes dollar rate to stop rial collapse
The move comes after the value of Iran's rial dropped 18 percent since Saturday.
2 min read
10 April, 2018
Iran has enforced a single exchange rate to the US dollar [Getty]
Iran moved on Tuesday to enforce a single exchange rate to the US dollar, banning all unregulated trading after the rial hit an all-time low.

The country's senior vice president, Eshaq Jahangiri, said the official price of the US dollar will be 42,000 rials as of Tuesday.

Jahangiri also said that trading at any other price was forbidden and would be considered as "smuggling".

The decision came late on Monday after a two-day hike in prices of foreign currencies that saw rial trading at 62,000 to the dollar — an 18 percent drop since Saturday.

The rial's slide is largely due to fears the Trump administration will withdraw from the nuclear deal between Iran and world powers and impose new sanctions.

The head of Iran's central bank, Valiollah Seif, appeared before parliament on Tuesday to explain the measure. He was met with angry objections and interruptions from a group of lawmakers who briefly pushed him around on the podium and demanded his resignation.

Seif blamed the currency drop on "lack of certainty" and said "enemies know the issue and try to use any opportunity" to create trouble for Iran.

Government spokesman Mohammad Bagher Nobakht alluded to a Saudi and Emirati plot to depress the rial, but did not offer details. 

"We are in an economic war and enemies seek to create problems for our economy," he said.

US President Donald Trump has repeatedly threatened to walk away from the historic nuclear deal, which was negotiated under his predecessor Barack Obama. 

On Monday, Iran's president Hassan Rouhani said that the US would regret violating the pact, adding Iran would respond in "less than a week" should that happen.

President Hassan Rouhani has staked his legacy on trying to revive the economy by rebuilding ties with the West.

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