Tehran, Iran, May 2
By Kamyar eghbalnejad - Trend:
The US dollar jumped to as much as 60,000 rials in the open market in the Iranian capital city of Tehran on May 1, Tuesday night.
According to a report by ILNA, a US dollar and the euro, respectively, traded for 50,920 and 71,000 rials in the open market in the early hours of Tuesday. A US dollar was worth 36,000 rials in mid-September 2017.
One of the main reasons behind the recent fluctuations in Iran’s foreign exchange market is due to fears of an imminent collapse of the 2015 nuclear deal between Tehran and world powers and the return of economic sanctions.
Back in January, US President Donald Trump said he was extending the sanctions relief on Iran for the last time, giving the European signatories a May 12 deadline to fix what he said “flaws” in the agreement or he would refuse to waive those bans.
On concerns over a return of sanctions, the rial plunged to an all-time low on April 9. In an attempt to stop the fall, the administration of President Hassan Rouhani held an emergency meeting and decided to unify the country’s official and open market exchange rates.
Following the meeting, the government announced the price of the dollar would be 42,000 rials in both markets, and for all business activities.
It seems that the protective policy by the government has not been that much successful as the official rate is now 42,000 rials while the open market rate is 60,000 rials, a rate similar to that prior to the implementation of the government’s single foreign exchange rate policy.
In the capital, licensed exchange offices and unlicensed street traders are no longer allowed to buy and sell US dollars and people can only get them from banks. Meanwhile, the black market trading is gaining momentum in the country as banks cannot address people’s needs.
The country is still dependent on the US dollar despite a recent move by the government to ditch the US dollar and replace it with euro as part of its plan to stabilize the currency market and reduce the country’s reliance on the American currency, the report said.
According to the report, the gold coin bubble in Tehran's market was also inflated registering a rise of 500,000 rials and selling for 18.90 million rials.
