Angry Iran protesters demand resignation of central bank governor amid rumoured embezzlement

Angry Iran protesters demand resignation of central bank governor amid rumoured embezzlement
In a tense stand off with security officials, crowds of protesters chanted slogans calling for the dissolution of the government-subsidised system of foreign exchange in Iran.
2 min read
15 June, 2020
Traders were reportedly left without foreign currency, despite depositing the equivalent in Rials [Twitter]
Protesters in Tehran gathered outside Iran’s Central Bank on Sunday, calling for the resignation of the governor in response to mounting frustration over a foreign exchange system perceived as inefficient and corrupt, Radio Farda report.    

Videos circulating on social media show a large group in a standoff with security personnel at the gates of the central bank chanting various slogans, among them "Hemmati, Resign, Resign" – referring to Abdolnasser Hemmati – as well as other slogans demanding the dissolution of a government-introduced system of currency exchange.

Iran currently has three exchange rates: the open market rate, the official rate and the NIMA rate (a Persian acronym for Consolidated System of Forex Transactions).

When the value of the Iranian rial plummeted in 2018, the country's central bank pegged the rial at 40,000 to the dollar, offering a subsidised rate for importing "vital" goods, such as medicines and wheat.

As the financial system was ravaged by crippling US sanctions, a special NIMA rate was set to ensure the central bank had enough hard currency. This was reserved for importers of other products which could not be produced domestically or had low demand, such as certain electronics or machinery.

The NIMA rate, which was supposed to place a higher value on the rial than the open market rate, now stands at 150,000 rials to the dollar, marginally less than the open market rate of 180,000.

According to media reports, protesters on Sunday were mainly importers who had not received foreign currency at the NIMA rate despite depositing the equivalent in Iranian currency months ago, provoking accusations of embezzlement in the system.

The NIMA network consists of multiple exchange offices, bank accounts, and companies in Iran and around the globe. Built on trust, it deals only in hawala, an Islamic system for moving money outside of the formal banking system, according to Aljazeera.

Several government news agencies came out on Sunday to defend the central bank, calling the gathering “suspicious”. The central bank itself quickly released a new list of those who had received foreign currency at the official and NIMA rates.

Government institutions are often accused of rampant corruption in Iran, leading to protests led by workers and traders, which have been violently supressed by the authorities.

Read also: Alleged Iranian spy facing execution, was arrested 'months before' Soleimani assassination

In November 2019, mass protests broke out against a sudden hike in fuel prices. Reuters have reported that nearly 1,500 were killed in the ensuring government crackdown, a figure rejected by the government.  

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