Continued Increase in Currency Prices in Iran; Dollar Surpasses 3500 Tomans

Reports indicate that the rise in the price of the dollar in the Tehran free market continues, with the head of Iran's Central Bank stating that the release of certain reports temporarily affected the currency market but stability will return. The Mehr News Agency reported that currency exchangers in Tehran sold each US dollar for 3,520 tomans on Sunday, December 9. The Iranian Students' News Agency (ISNA) also reported the afternoon trading rate for each US dollar at 3,560 tomans. This is the highest price for the US dollar since the government of Hassan Rouhani took office in 2013. According to these reports, the price of the euro, the currency of 18 European countries, has also reached 4,350 tomans. The price of each US dollar had risen to about 3,395 tomans on Saturday, December 8, and increased by more than 100 tomans on Sunday. Meanwhile, the Mehr News Agency reported that the price of each US dollar in the free market was 3,236 tomans last Sunday. In this context, Ali Tayebnia, Iran's Minister of Economy, commented on the recent fluctuations in the currency market, stating that no significant changes have occurred in the fundamental conditions of the currency and capital markets in Iran, and we expect stability in these markets. The Minister emphasized that people should not engage in emotional behaviors when real factors have not changed, as those acting based on psychological factors will face losses, as has been seen in the past. Tayebnia added that in the short term, the exchange rate will rise, and those who buy during this period will certainly face losses and regret it. He noted that this has been experienced multiple times in the past year, urging people to avoid emotional behavior. The Minister also mentioned that the recent changes are mainly due to some market excitements and psychological factors influenced by certain news releases. People can be assured that in the fundamental and real economic conditions of the country, no significant changes have occurred, and these changes are temporary. Previously, financial and banking experts in Iran had stated that since people expected the nuclear negotiations to yield results, but due to the extension of these negotiations, demand for buying dollars increased, leading to a rise in the dollar rate in the market. Kamal Seyed Ali, former currency deputy of the Central Bank, stated that economic actors expected a final agreement from the nuclear negotiations before December 3, which led to a wave of buying in the market after the negotiations were extended. Meanwhile, according to Fars News Agency, Valiollah Seif, head of Iran's Central Bank, stated that there is no reason for the fluctuations in the currency market, as supply and demand are in equilibrium. Some news has temporarily affected prices, but equilibrium will quickly return to the market. The head of the Central Bank mentioned that in a recent meeting with bank and financial institution managers, he emphasized that banks should not allow the money market and interest rates to become unbalanced, and we do not want to resort to directive methods that could create distortions; therefore, banks should wisely avoid unhealthy competition. While the dollar rate has increased in the past week, it has faced minimal changes and stability in this market over the past year.