Iran's Government Changes Reporting Currency from Dollar to Euro

In the continuation of the currency crisis in Iran, President Hassan Rouhani's government on Wednesday, April 29, requested executive bodies to adopt the euro as the 'reporting currency.' Simultaneously, the Supreme Leader of the Islamic Republic attributed the recent crisis in Iran's currency market to 'foreigners and their intelligence agencies.' The Iranian government, in its Wednesday meeting, mandated all executive bodies to use the euro as their 'reporting and statistical currency for financial data.' Until now, Iranian officials had presented the country's economic statistics, including currency obligations, in U.S. dollars; however, about a year and a half ago, Valiollah Seif, the head of the Central Bank, seriously proposed changing the reporting currency from the dollar to the euro. Mehdi Kasraei-Pour, the director general of currency policies and regulations at the Central Bank of Iran, stated last June that changing the reporting currency 'does not affect Iran's economic performance' because, according to him, the U.S. dollar does not play a significant role in foreign revenues and the currency needed for imports. Due to dollar sanctions, this currency 'neither has the capability for transfer and use in international banking transactions nor has a special place in the Central Bank's foreign reserves.' Iranian officials have attributed the sudden surge in currency prices in the free market, which saw the price of the U.S. dollar reach 6,000 tomans, to various factors such as 'foreign countries,' 'foreign intelligence services,' 'wealthy regional governments,' 'Telegram,' and 'other non-economic factors,' issuing new directives regarding this matter. The Tehran police reported last week the arrest of 12 individuals labeled as 'market disruptors,' and Nasser Makarem Shirazi, a cleric residing in Qom, called for the execution of 'a few key currency brokers.' Hassan Rouhani's government also announced a 'single rate dollar at 4,200 tomans' and placed exclusive currency transactions in the hands of banks, declaring off-regulation currency exchange operations as 'smuggling' and considering possession of more than 10,000 euros or its equivalent as a 'crime.' Fereydoun Khavand, an economic analyst residing in Paris, deemed it 'impossible or very difficult' to influence the currency market through directives, identifying the main factors affecting the turmoil in Iran's currency market as the Islamic Republic's tense foreign policy, the jeopardy of the JCPOA, and the possibility of the U.S. withdrawing from this agreement. Nevertheless, currency exchanges in Tehran have not traded dollars at the price of 4,200 tomans, and reports indicate that the free currency market has seen little activity in recent days, with transactions mostly conducted secretly. Concurrently with the Iranian government's new policies regarding the change of reporting currency to the euro, the Supreme Leader of the Islamic Republic once again attributed the economic crisis in the country to 'foreigners.' Ayatollah Ali Khamenei, speaking to employees of the Ministry of Intelligence, referred to 'recent issues in the currency market,' stating: 'When one examines these issues more closely, the fingerprints of foreigners and their intelligence agencies are evident.' According to the Supreme Leader, there exists an information war between 'enemies' and the 'Islamic system,' which he claims includes 'creating financial and economic disorder,' 'infiltration and theft of information,' and 'changing people's beliefs' as methods of this war. Previously, Ahmad Alavi, an economist residing in Sweden, had stated in an interview with Radio Farda that the increase in currency rates in Iran's market was 'predictable,' noting that 'since no changes have occurred in the structure of Iran's economy contrary to the Central Bank's promises, the same previous and fundamental factors such as inflation, people's rush to the currency market, and capital flight from the country have caused the continuous increase in currency prices.'