Holding More Than 10,000 Euros in Iran is Prohibited

One day after the remarks of Iran's First Vice President about the dollar being set at a single rate of 4200 tomans, the Central Bank of Iran announced that holding more than 10,000 euros, or its equivalent in other currencies, is 'illegal' for individuals. Meanwhile, despite government officials' promises to supply dollars at the price of 4200 tomans, some news agencies reported that dollars were being sold at exchange offices for around 5000 tomans. According to the IRNA news agency, on Tuesday, April 21, the Central Bank of Iran announced that from this day onward, it would provide currency for all legal commercial and production needs based on a rate of 4200 tomans per dollar. The bank also declared that 'any buying and selling of currency outside the banking system and authorized exchange offices' is considered 'smuggling.' According to this announcement, 'the amount of currency that can be held by each person' is a maximum of 10,000 euros or its equivalent in other currencies, and 'if any amount exceeding this is discovered in possession of any individual, the offender will be dealt with according to the law.' The bank urged all individuals who possess more than 10,000 euros to deposit it in banks by the end of April. Es'hagh Jahangiri, Iran's First Vice President, announced on the evening of Monday, April 20, after an extraordinary meeting of the government economic headquarters to manage the currency market, that 'the dollar rate will be 4200 tomans from Tuesday, and other unofficial rates will be considered smuggling.' According to Mr. Jahangiri, the dollar rate from Tuesday will be 4200 tomans for 'all economic actors and to meet all their legal and administrative needs, including the service needs of travelers, students, researchers, and scientists who need currency for their research work, and with this number, currency will be allocated to all the country's needs through the Central Bank and authorized exchange offices.' However, news agency ILNA reported on Tuesday in a field report that 'the dollar is still not being offered at the price of 4200 tomans and is being sold at the previous day's price of 4969 tomans on the pretext that the Central Bank has not yet distributed dollars at this rate.' According to this news agency, 'according to statements from state exchange offices, the sale of 4200 tomans dollars will begin at 2 PM,' but 'private exchange offices are refraining from any activity regarding buying or selling currency, and some of these offices have lowered their shutters.' News agency ISNA also reported that 'the latest news from the currency market indicates that queues for buying dollars have lengthened, and the 4900 tomans dollar has also accumulated in exchange offices, but there is still no news of the 4200 tomans dollar, and this price is displayed on the boards of some exchange offices, while the boards of most exchange offices are turned off.' Meanwhile, news agency Fars reported with a video of 'heavy crowds' of people trying to buy the 4200 tomans dollar, stating that 'crossing the sidewalks adjacent to the exchange offices is difficult.' Some analysts consider the political outlook of Iran and the possibility of the United States exiting the nuclear agreement as influential factors that cannot be overlooked. However, Hesameddin Ashna, an advisor to Hassan Rouhani, implicitly accused Saudi Arabia of influencing the Iranian currency market through the United Arab Emirates, Turkey, and the Kurdistan Region of Iraq. Some reformists, including Mostafa Tajzadeh, have also implicitly attributed this event to the actions of the Islamic Revolutionary Guard Corps. Some Telegram channels have announced that a significant portion of the dollars held by economic institutions affiliated with the IRGC has left the country, affecting the dollar price. In this context, the head of the Central Bank stated in a public session of the parliament on Tuesday that 'uncertainty about the future,' 'international tensions,' 'non-economic factors,' and what he called 'enemy actions' were the reasons for the increase in the dollar price in recent days; Valiollah Seif also said: 'There are footprints indicating that even neighboring countries, including the UAE and Saudi Arabia, are not innocent in the fluctuations.' According to Mr. Seif, in previous years, the currency market had 'no movement' until April 15, but this year, the announcement of prices on Telegram and social media 'created turmoil.' The head of the Central Bank also announced that he had proposed replacing the dollar with the euro in foreign transactions to the Supreme Leader of the Islamic Republic, and Ayatollah Khamenei had agreed to this proposal. The proposal to replace the euro with the dollar in foreign transactions has been raised by various government officials for over 10 years but has not been realized. Meanwhile, Ahmad Alavi, an economist, wrote on November 8, 2017, in a note on Radio Farda that despite efforts to eliminate the dollar from Iran's foreign transactions, 'the Iranian economy has become more dollarized in practice,' and 'merchants and ordinary people also pay attention to the dollar price in their daily transactions, let alone traders and investors who operate globally.' At the beginning of the head of the Central Bank's remarks, the session of the Islamic Consultative Assembly became tense, and several protesting representatives demanded to speak before Mr. Seif. However, Ali Larijani, the Speaker of the Parliament, rejected this proposal and threatened that if the representatives did not disperse, Mr. Seif would not speak, and the parliament would move to the next agenda. The sudden increase in the dollar price began on April 18 of this year, and within three days, the price of this currency increased by about 900 tomans, reaching six thousand tomans. The price of the US dollar in the free market in Iran had remained relatively stable last December, but during the Nowruz holidays, it experienced a jump of 200 to 250 tomans. Some analysts say that the announcement of a 'fixed rate' for currency and 'security measures' may prevent the increase in currency prices in the short term, but will not have any effect in the long term, just as despite 'security measures in the previous government' or in the last months of last year, the price of currency continued to rise. Meanwhile, Abbas Abdi, a political activist, wrote on his Twitter: 'As long as the government sets a price for the dollar, it does not matter whether it is 4200 tomans, 3200 tomans, or 6200 tomans. This approach will not yield results. Do not auction off the people's currency. It is foolish.' After the sudden increase in currency prices in the last months of the previous year, law enforcement officials reported the arrest of dozens of 'currency brokers.' The public and revolutionary prosecutor of Tehran also announced that this body had blocked 1,300 accounts, which he said belonged to 'disruptors' of the currency market, with a balance of 37 billion tomans.