Dollar in Iran Reaches 16,000 Tomans; Currency Traders Refuse to Sell

The free currency market in Iran on Tuesday, October 2, witnessed another increase in the prices of various foreign currencies, with the price of each US dollar reaching 16,000 tomans, and some currency traders are refusing to sell their currency. According to ISNA news agency, the dollar rate on Tuesday reached 15,900 tomans, and gold coins were traded at four million 740 thousand tomans. Additionally, based on prices published on currency and gold websites, the price of the US dollar reached 16,000 tomans, and the euro also increased by about 1,000 tomans to 18,500 tomans. Each British pound also surpassed 20,000 tomans. Some websites reported that the dollar price decreased to 15,800 tomans in the late hours of Tuesday. The US dollar had crossed the 15,000 tomans threshold on Sunday. Analysts believe that the attack on the military parade in Ahvaz, the failure of negotiations between Iran and Europe, ambiguity in the approval of anti-money laundering bills, the decrease in Iran's oil exports, and a Security Council meeting chaired by Donald Trump this week are reasons behind the increase in currency prices. Meanwhile, ISNA reported, citing an unnamed currency trader, that the dollar rate could reach 25,000 tomans. However, another trader predicted that the dollar price would reach 18,000 tomans in the next two to three days and then trend downward, stabilizing between 12,000 to 14,000 tomans in the coming months. This trader claimed that the government would lower the currency rate by announcing a 26% interest rate on bank deposits in the coming weeks. The Central Bank has reduced the bank interest rate from 24% to 15% since 2015. Recently, reports have emerged regarding the possibility of increasing the bank interest rate. Only 'four billion dollars' have been offered in the NIMA system while the plans of Hassan Rouhani's government in recent months to control currency prices have failed. Nevertheless, the head of the Central Bank stated that the currency market is 'almost managed and the atmosphere is moving towards a decrease in currency prices.' Abdolnaser Hemmati, in an interview with the House of Nation website, which is affiliated with the parliament, also reported that of about 23 billion dollars in non-oil exports conducted until September 23, only about four billion dollars have been offered in the NIMA system. He added, 'Methods for returning export currency to the economy have been predicted, based on which exporters must officially conduct imports or provide currency through the NIMA network or any method determined by the Central Bank.' Mr. Hemmati did not provide further explanation about the approximately 19 billion dollars in currency that, according to him, has not entered the economy. Meanwhile, according to ISNA, from July 27 to September 19, only one billion 467 million and 932 thousand euros were offered in the secondary market, with petrochemical companies accounting for 73% of that. Previously, some analysts had identified the non-entry of petrochemical currency into the market as one of the main reasons for the increase in currency prices alongside the US exit from the JCPOA. In July, the government accepted the failure of the single exchange rate policy and established a 'secondary currency market,' which means a three-tier currency system. In this plan, exporters who previously did not offer their currency in the 'Integrated Currency System' (NIMA) will offer it at an agreed rate so that it can be allocated to non-essential goods not covered by the 4,200 tomans currency. A group of critics of the secondary currency market argue that petrochemical and steel companies and other 'private state' companies that are the main suppliers of currency in the secondary market benefit the most from this market. According to these critics, while these companies benefit from energy subsidies and other exemptions, they sell the currency obtained from exports at high prices in the secondary market. According to ISNA, the House of Nation website, currency and gold websites, social media, and Radio Farda.