Warning from the Organization for the Protection of Consumers to Currency Speculators Concurrent with Announcement of New Currency Policies

Simultaneously with the Central Bank of Iran's statement regarding the establishment of new currency policies and the regulations for currency exchange offices, the Organization for the Protection of Consumers warned that it would take "decisive" action against "disturbers of the currency market's tranquility" in Iran. According to IRNA, the Central Bank's announcement states that under the new currency policies, currency exchange offices are only allowed to transfer currency "at the instruction of any of the licensed currency banks," and the purchased currency must be transferred to applicants through the banking system. The Central Bank has also mandated that currency exchange offices are "not permitted to buy and sell physical banknotes until further notice, and this will be done through banks," and their activities in providing currency for the import of goods and services to Iran are "only possible after order registration and service registration." According to this resolution, currency transfer through the banking system or authorized exchange offices is done at the request of the principal bank. In a second announcement from the Central Bank, it addressed the provision of currency for the import of goods and services from abroad to free trade-industrial zones and special economic zones. According to this announcement, "the release of currency obligations for importers of goods and services to free trade-industrial zones and special economic areas is contingent upon the submission of the final customs clearance permit or the original invoices of completed work and the employer's confirmation." The Central Bank emphasized that in cases where the relevant currency is "provided at the exchange rate by the Central Bank, but no remittance has been issued, documents of transport must be submitted to the principal bank within a maximum of six months from the date of currency provision, and in this case, the provided exchange rate will be the basis for settlement." The Central Bank of Iran also announced that regulations regarding the conditions and methods of currency provision for 33 cases, including "travel, student, medical currency, Iranian insurance companies, international transport drivers, accounts of Iranians residing abroad, and foreign airlines," have been formulated and communicated to the country's banking network. These resolutions were issued after the Central Bank of Iran temporarily halted the sale of currency to exchange offices. In this regard, Mohammad Ali Karimi, the Director General of Public Relations at the Central Bank, stated that currently, buying and selling currency in the market is off the table as the government and Central Bank are trying to provide the community's currency needs based on the new resolutions. According to him, there will be no price other than 4,200 tomans for the dollar, and currency speculators must sell their currencies to banks at this price. Concurrently with the publication of these announcements, the official dollar rate in Iran on Sunday (April 15) was announced as 4,200 tomans. The pound also increased by 248 rials to 5,979 tomans, and the euro rose by 121 rials to 5,180 tomans. However, ILNA reported that despite the decrease in the number of speculators in the free currency market, this market is still active, with "each US dollar trading up to 5,300 tomans and each euro up to 6,700 tomans." The warning from the Organization for the Protection of Consumers to "disturbers of the currency market's tranquility" was issued simultaneously as the head of the Organization for the Protection of Consumers called on currency exchange offices to implement the government's currency resolutions and announced the organization's "decisive and uncompromising" action against "violators and disturbers of the tranquility" of the country's currency market. Jamal Ansari, Deputy Minister of Justice and head of the Organization for the Protection of Consumers, stated to the Mizan News Agency that currency exchange offices acting contrary to the government's currency resolutions are "violators and will be dealt with under the law against smuggling of goods and currency." According to this official, "special branches for addressing currency violations are stationed around the clock in the currency market." He warned that "all individuals and legal entities that disrupt the order of the currency market and disturb the tranquility of this market are under investigation and follow-up by supervisory bodies and will be dealt with according to the law without leniency." The price of the US dollar, which was about 3,700 tomans last summer, increased to around 6,000 tomans in early April this year. In response to the sharp fluctuations in the market, the government of Hassan Rouhani announced a single exchange rate for the dollar at 4,200 tomans and implemented new regulations for currency transactions in banks and the free market. Most currency exchange offices have refrained from buying and selling currency in recent days due to ambiguity in the new resolutions and severe price fluctuations, and the government has also emphasized that "currency exchange offices are not permitted to buy and sell banknotes until further notice, and this will be done by banks." The Cabinet had previously declared currency exchange operations and transactions outside the Central Bank's regulations as "smuggling" and considered carrying more than 10,000 euros or its equivalent as a "crime." In recent days, the Tehran police also reported the arrest of 12 individuals whom they referred to as "market disruptors," and Ayatollah Makarem Shirazi called for the execution of "a few key currency speculators." Meanwhile, Fereydoun Khavand, an economic analyst residing in Paris, stated that influencing the currency market with a decree and regulation, or through police and emergency actions, is "very, very difficult, if not impossible." This economist also cites the Islamic Republic of Iran's tense foreign policy, the jeopardy of the JCPOA, and the possibility of the US exiting this agreement as significant factors affecting the turmoil in the currency market in Iran. Ahmad Alavi, an economist residing in Sweden, also believes that since there has been no change 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, currency hoarding, and capital flight from the country have led to a continuous increase in currency prices.