Tehran Prosecutor: Central Bank Injected $18.5 Billion into the Market Over Six Months

The Tehran prosecutor announced the arrest of "53 currency suspects" in the past 10 days and acknowledged the government's unsuccessful efforts to control the currency market, stating that the Central Bank injected $18.5 billion into the market over six months to stabilize the exchange rate. Abbas Jafari Dolatabadi said on Tuesday, November 1, that after the prohibition of currency trading in public places, "53 currency suspects" were arrested in the last 10 days. He did not provide further details about the charges against the detainees. Following the crisis in Iran's currency market, judicial officials reported the arrest of over a thousand currency and coin sellers, and courts have held hearings for dozens of those detained. Meanwhile, Gholamhossein Mohseni Ejei, the first deputy and spokesperson of the judiciary, announced on October 30 that the death sentences of Vahid Mazloomian and Mohammad Ismail Qasemi, two coin sellers, had been confirmed by the Supreme Court. These judicial actions come as many analysts have previously stated that "security measures," while potentially preventing short-term currency price increases, will have no long-term effect, as evidenced by the continued rise in currency prices despite "security measures in the previous government." The Tehran prosecutor also acknowledged that the announcement of a 4200 Toman exchange rate for the dollar and the prohibition of selling dollars at higher prices led to increased demand for currency. He reported that the Central Bank injected $18.5 billion into the market in the second half of 2017 to stabilize the exchange rate, but it "had no effect, and the dollar became more expensive day by day." Adel Azar, head of the Court of Audit, had previously stated that last year, $22 billion was injected into the market as "intervention currency." The government also acknowledged the failure of its single exchange rate policy in July of this year and established a "secondary currency market," which implies a three-tiered currency system. However, 50 economists wrote to the heads of the three branches of the Islamic Republic, requesting that all currencies obtained from the sale of raw and primary mineral, steel, and petrochemical materials be sold to the Central Bank and that the "secondary currency market be shut down." The Tehran prosecutor further stated that the Central Bank has paid at least $10 billion to individuals and companies through banks in recent years, but "many cases" of this money have not returned. According to Dolatabadi, an individual in Khuzestan purchased a company and received $800 million from 2015 to 2017 but "did not fulfill his currency obligations and is currently on the run." He also mentioned that another individual received $240 million in government currency and, after selling it at the free market price, bought a factory in Tabriz. The Tehran prosecutor did not specify how much of the $10 billion paid to individuals and companies has not been returned, nor did he indicate over what period this amount was disbursed. Valiollah Seif, the head of the Central Bank of Iran, had previously announced that the country's "banking arrears" amounted to "100 trillion Tomans." Meanwhile, Ahmad Tavakoli, a member of the Expediency Discernment Council, stated on August 17 that 110 trillion Tomans of debts and banking arrears belong to 108 individuals. According to reports from media and statements from some officials, 80% of banking debts belong to 500 debtors.