Another Record in Iran's Currency Market; US Dollar Reaches 5100 Tomans

The exchange rate of the US dollar has once again set a record during the Iranian New Year holidays, reaching 5100 tomans in the free market. One reason cited for this is the closure of exchange offices, allowing brokers to take the initiative. The Iranian Students' News Agency, ISNA, reported on Tuesday, April 7, that in the absence of exchange offices, brokers are conducting business on the streets and in Ferdowsi Square 'using mobile phones and in person.' The report states that 'only a few bank exchange offices sell currency to citizens under specific conditions and with complete travel documentation, and their prices do not differ significantly from those of brokers.' According to ISNA, the exchange rate of the US dollar in bank exchange offices was 4900 tomans, but the lines of people at these offices are very long, and brokers are also in the queues, causing people to regret waiting. The price of the US dollar in Iran, which had remained relatively stable over the past month, finally jumped by 200 tomans on Tuesday, exceeding 5000 tomans and reaching 5050 tomans, contradicting the statements and promises of the officials of Hassan Rouhani's government to combat the rising trend of currency prices in the country. Last month, Valiollah Seif, the head of the Central Bank of Iran, advised people not to buy dollars as they would 'become cheaper.' He stated, 'Investing in currency is not justified, and those who convert their resources into currency will incur losses.' Following this, the Iranian government took special measures to prevent the dollar rate from rising further, including cracking down on currency brokers and arresting those who, according to the police, were illegally exchanging currency. Limiting currency sales solely to travelers abroad and requiring travel documents was another measure implemented based on the Central Bank's directives last month. However, these measures were not enough to prevent the depreciation of the Iranian rial. The Mehr News Agency reported on Tuesday that the US dollar was also traded at 5105 tomans in the free market. Interestingly, the price of the euro in bank exchange offices does not differ significantly from the free market. ISNA reported that the euro is sold at 6090 tomans in bank exchange offices, which is only 20 tomans cheaper than its price in the free market. Economist Ahmad Alavi, in an interview with Radio Farda, deemed the increase in currency rates in Iran predictable. He stated that since no changes have occurred in the structure of the Iranian economy contrary to the Central Bank's promises, the same previous and fundamental factors such as inflation, the rush of people to the currency market, currency hoarding, and capital flight from the country have caused a continuous increase in currency prices. This economist also rejected police policies such as deploying police forces in the currency market and arresting brokers, emphasizing that such populist methods cannot control the situation, and long-term measures need to be taken, which the Central Bank has been unsuccessful in achieving.