The Price of the Dollar in Tehran's Free Market Reaches 12,000 Tomans Again

Reports from Iran indicate that the price of foreign currencies in Tehran's free market has once again risen, with each US dollar reaching 12,000 tomans and each euro reaching 14,000 tomans. The gold market was also turbulent on Sunday, September 2, with the price of each coin reaching 4 million and 400 thousand tomans. The ISNA news agency reported that the reason for the momentary rise in prices in the currency and coin market was due to an "increase in demand." According to this news agency, the currency market was "volatile and emotional, which started a few days ago and intensified yesterday. The dollar reached the threshold of 12,000 tomans and was traded at 11,900 tomans, while the euro was sold at 13,800 tomans." ISNA also reported that "currency exchangers who sell service currencies, including travel, student, and medical currencies within the framework of the Central Bank's regulations, kept prices close to the market rate as before, selling the dollar at 11,800 tomans and the euro at 13,700 tomans." Iran's financial markets, which have been severely turbulent in recent months, experienced a brief period of calm after the Central Bank's new currency policies were introduced on August 7, during which the dollar price fell below 10,000 tomans. However, in recent days, the prices of currency and gold coins have surged, which, according to ISNA, "the reasons for the rise in currency prices relate to some news and signals from officials, and part of it is due to upcoming demand." This news agency quoted "market participants" as saying that "ordinary sellers are now very scarce in the market, and if there are any sellers, they are individuals who trade for speculation." Abdolnaser Hemmati, the head of the Central Bank of Iran, stated on Saturday that "foreign reserves are the honor of the Central Bank" and the policy is to "not use the Central Bank's resources to regulate the currency market" and to control the currency market through the entry of resources obtained from non-oil exports. However, economic analysts and market participants say that exporters of non-oil goods, who are required to provide their currencies to the market to bring it into balance, only bring part of it into the market, which is insufficient to meet the needs. According to statistics provided by the head of the Central Bank of Iran, the amount of Iran's non-oil exports is 40 billion dollars per year. Following the US withdrawal from the nuclear agreement with six world powers known as the "JCPOA" on May 8 of this year, Iran's economic situation has become severely tense, and in addition to the decrease in oil exports in the past month, the prices of essential goods, currency, and coins have also sharply increased. The first round of sanctions against Iran began with an executive order from Donald Trump. Donald Trump, the President of the United States, has stated that he is ready to negotiate with Iranian officials to reach a better agreement regarding the nuclear program, missile program, and Tehran's role in the region. However, officials of the Islamic Republic, especially Ayatollah Ali Khamenei, have rejected this offer. The leader of Iran has even banned any negotiations with the US. It seems that in addition to the increase in demand in the currency and gold coin market, the disappointment of Islamic Republic officials with the European Union's support for Tehran against US sanctions has caused a shock to the market and an increase in prices. European countries have stated that if Iran adheres to its commitments under the JCPOA, they will also consider economic incentives for Tehran, but no action has been taken in this regard yet. This has angered Tehran officials to the extent that the leader of Iran told Hassan Rouhani's government on September 1 to "give up hope on the Europeans regarding issues like the JCPOA." In the latest instance, the head of Iran's Strategic Council on Foreign Relations warned European countries on Sunday about the "serious consequences of Iran not benefiting from the nuclear agreement." Kamal Kharrazi, in a meeting with Alistair Burt, the UK Foreign Office Minister for the Middle East and North Africa, stated: "The three European countries have so far failed to take the necessary action to secure Iran's interests from the JCPOA." He referred to Britain, France, and Germany, which were members of the P5+1 group. Mr. Kharrazi added: "The imposition of sanctions and pressures and the lack of swift action by Europe in fulfilling its commitments under the JCPOA will have serious repercussions." The United States re-implemented the first round of sanctions against Iran in mid-August, which had been suspended due to the JCPOA. The second round of sanctions, which includes restrictions on Iran's oil sales, will take effect on November 4.