Iran Seeks To Reverse Fall Of National Currency

Iranian authorities have opened a Foreign Exchange Centre in an attempt to control the continued fall of the national currency against the dollar, which is now being traded at 24,750 toumans compared to almost half this rate last year.

Mahmoud Bahmani, the head of Iran’s Central Bank, told the Mehr News Agency that foreign currencies will be offered at a slightly lower rate at Foreign Exchange Centres compared to the average rate on the open market. “If demand declines, in the days that follow we will definitely see a lower exchange rate.”

He added that “all exporters, public companies, families and those who have foreign currencies will be able to offer their foreign currency at the Foreign Exchange Centre at appropriate rates.”

The centre opened on Sunday for a trial run and will officially begin operation starting Monday September 24.

Parliament has given the Central Bank three days to rein in the rapidly fluctuating currency market before it employs its regulatory levers.

Experts have questioned the viability of such a centre, pointing out that Iran does not have the capability to trade foreign currencies and there needs to be a third country involved in such a venture.

Iran’s National Development Fund has announced that it is being allowed to exchange 20 percent of its foreign currency reserves in order to supply buyers who come to the new Foreign Exchange Centre offering their national currency.

The foreign currency market in Iran has become tumultuous with the tightening of U.S. sanctions against Iran. Some officials have also blamed questionable economic policies of the Ahmadinejad administration for the steep devaluation of the national currency.