Blocking 1300 Bank Accounts Related to 'Disruption in the Currency Market'

The Tehran Prosecutor General announced that this institution has blocked 1,300 accounts allegedly related to 'disruptors' of the currency market, with a balance of 37 billion tomans. According to Tasnim News Agency, Abbas Jafari Dolatabadi stated on Tuesday, March 8, that 'so far, 27 of the currency market disruptors' have been arrested by the Ministry of Intelligence and the police forces. Mr. Dolatabadi mentioned that in this regard, 1,300 accounts with a balance of 37 billion tomans and a financial turnover of 6 trillion tomans have been blocked. He also stated that according to the anti-smuggling law, action must be taken against those who create 'disruption' in the currency market through 'organized buying and selling and currency smuggling.' On Sunday, February 18, the Tehran Prosecutor also confirmed the arrest of 27 individuals in connection with the rising currency prices. Previously, the police had announced the arrest of over 90 'currency brokers' and the closure of 10 exchange offices. The actions of the Tehran Prosecutor's Office and the police come at a time when many analysts have stated that 'security measures,' while they may prevent the increase in currency prices in the short term, will have no long-term effect, just as currency prices continued to rise despite 'security measures in the previous government.' Before the sudden increase in currency prices in 2012, Mahmoud Ahmadinejad introduced 22 individuals as 'the main culprits of the currency market turmoil' without naming them. Mohammad Reza Rahimi, Ahmadinejad's first vice president, also announced on October 22, 2012, the arrest of an individual named 'Jamshid Bismillah,' stating that he was a factor in disrupting the Iranian currency market and 'was determining the price of currency in Iran.' Jamshid Mirabi, whom Mr. Rahimi referred to as 'Jamshid Bismillah,' denied the allegations in a July 2014 interview with the economic newspaper Ta'adol, stating that he had been arrested in October 2012 along with 90 others. The dollar rate has recently approached 5,000 tomans. Last week, the Central Bank temporarily implemented its currency measures to prevent the increase in the dollar price. The Central Bank of Iran's three-part program to control the currency includes 'issuing deposit certificates with a 20% interest rate, issuing currency-based deposit certificates with interest rates of 4 and 4.5%, and a pre-sale plan for Bahar Azadi coins through selected branches of Bank Melli.' In analyzing this program, Fereydoun Khavand, an economic analyst and university professor, noted in a memo for Radio Farda that all three axes of the Central Bank's new policy pursue a common goal: 'offering diverse options to depositors to withdraw liquidity from the currency market and quell its volatility.' Mr. Khavand pointed out that the 'incorrect decision' of the Central Bank to lower interest rates, which was made solely based on a decrease in inflation rates, is one of the factors that has created the current situation in the currency market. He also emphasized that the Central Bank's influence on the Iranian currency market is not very extensive, and geopolitical variables also significantly affect the Iranian currency market. This economic analyst noted that currency market players are watching the fate of the 'JCPOA' and will consider the potential exit of the United States from this agreement as a warning sign for further destabilization of the rial. Regional tensions, including the risk of Iran becoming more deeply involved in Middle Eastern conflicts, impact the country's currency market. The variables that Mr. Khavand emphasizes are not within the Central Bank's control.