Currency Turmoil Causes 'Confusion for 12,000 Trucks'

The newspaper Shargh has reported on the 'confusion of 12,000 trucks' at Iran's borders due to 'currency turmoil' and 'disputes' between cargo owners and truck drivers. In its Wednesday, July 31 issue, the newspaper stated that the increase in currency rates in Iran has created 'disruptions' in international transit. Reza Nafisi, the director of the Transit and International Transport Office of the Road Maintenance Organization, told the newspaper that 'currently, 400,000 foreign transits per year, handled by about 13,000 drivers, are facing currency challenges.' According to Nafisi, since the 'serious rise in currency prices,' despite holding numerous meetings with the Central Bank, it was agreed that 'different currencies would be allocated for each route due to cost differences, but the banks involved have been 'delaying' and have not designed the relevant software. He also reported that the 'currency conversion challenge' has not been resolved since May and added that due to these problems and the lack of euro allocation to drivers by the Central Bank, they are now 'obtaining their currency from acquaintances or illegally from the free market to be able to transit goods.' Nafisi also pointed to the impact of currency fluctuations on exports, stating that 'this is why we are facing a decrease in exports at the borders.' Masoud Daneshmand, the head of the Transport Federation, also identified the current problem for drivers at Iran's borders as 'currency,' stating: 'Drivers in international transit mainly contracted with cargo owners in rials, but now with the decline in the value of the rial, it no longer makes sense and does not cover costs.' Daneshmand criticized the failure to fulfill the promise of allocating 4,200 tomans to international transit drivers, reporting the 'confusion' of nearly '12 to 13 thousand active drivers' on the international transit route who, according to him, are 'stuck at the border and are not loading cargo.' He noted the 'severe drop' in the number of trucks loading cargo and reported a 'backlog' of export cargo at customs, the fate of which is uncertain. According to Shargh, since late 2017 and following the 'unregulated increase in currency rates and the declaration of dollar buying and selling in the free market as smuggling, international transit has been challenged.' Accordingly, 'the cargo owner or exporter, in addition to grappling with moving their currency in the global banking system, is now also facing problems with truck drivers.' The newspaper wrote that the problems plaguing road transit are so serious that previously, on the Bazargan border route, 'about 40 to 50 truck movements to outside the border were conducted daily, but now this has decreased to four to five trucks.' The report of the near paralysis of road transit for Iranian drivers comes as officials in Rouhani's government have been unable to control the currency market in recent months, and other officials have also attributed the current state of the currency market in Iran to 'dirty hands behind the scenes' and 'enemy intelligence services.' The Central Bank of Iran has also attributed the historic increase in the dollar rate and the surge in the gold market 'mainly' to 'enemies' and states that these developments 'do not correspond to the economic realities of Iran.' The sudden increase in currency and gold prices, which began before the announcement of the U.S. withdrawal from the JCPOA, escalated to the point where on Tuesday (August 8), the price of the U.S. dollar in Tehran's unofficial market reached nearly 12,000 tomans. Most officials of the Islamic Republic, however, attribute this price increase to 'psychological shock' and 'exploitation by brokers.' According to the previous policy of Hassan Rouhani's government, the currency needed for the import of all goods was provided at a rate of 4,200 tomans per dollar. This action drew criticism from several experts, and Akbar Turkan, an advisor to the Iranian president, also stated that importers, using 'a thousand tricks and deceptions,' sell goods imported with 4,200 tomans at a price of eight thousand tomans per dollar. Ultimately, in July, the government practically acknowledged the failure of this policy and created a 'secondary currency market,' which means a three-tier currency system.