Iran's Central Bank Attributes Currency Surge to 'Enemies' Conspiracy

The Central Bank of Iran, in a statement, attributed the historic rise in the dollar rate and the surge in the gold market 'mainly' to 'enemies' and stated that these developments 'do not correspond to the economic realities of Iran.' This statement was issued on a day when the judiciary announced the arrest of '29 economic disruptors.' On August 7, the Central Bank stated, 'We are closely monitoring the recent developments in the currency and gold markets, which are mainly due to the conspiracy of the enemies of the country aimed at creating turmoil in the economy and disturbing the psychological peace of the people.' On that Sunday, the price of each US dollar in the unofficial market surpassed 10,000 tomans, and the price of gold coins also exceeded 4 million tomans. The sudden spike in currency and gold rates occurred on the same day that Abdolnaser Hemmati began his role as the new governor of the Central Bank of Iran. The Central Bank mentioned that it is preparing 'appropriate programs and new approaches' that were also outlined in the new governor's announced program. While no specific date was provided, the bank added that this program would be operational and communicated in the coming days. Iranian officials had previously stated they have plans to counter the rising rates of currency and gold. This is not the first time they have attributed such developments to 'enemies.' The new governor of the Central Bank stated during his introduction that 'enemies are trying to destroy the social capital of the government and convey weakness in managing the country through sanctions.' On the same day this statement was issued, Gholamhossein Mohseni Ejei, the judiciary spokesperson, announced that 29 individuals, whom he described as 'disruptors of the country's economic system,' had been arrested. According to Mr. Ejei, arrest warrants for other individuals have also been issued, and they may be arrested soon. He stated that the charges against 'many of them are at the level of corruption on earth.' The arrests related to developments in the currency and gold markets are not new; for instance, one day before the historic rise in the dollar price, the judiciary spokesperson reported the arrest of 18 individuals in cases of 'illegal car imports' and 'currency market disruption.' While Iranian officials have spoken of new arrests, many analysts and experts argue that 'security measures' may prevent a short-term increase in currency prices, but will have no long-term effect. These analysts point to similar actions taken during the previous Iranian administration, alongside the continued rise in currency prices. A group of analysts also considers the issue of increasing liquidity and the current government's policies in this regard as significant. From the perspective of this group of experts, the government's and Central Bank's decision to withdraw excess liquidity from banks, thus directing it towards the currency market, was 'a wrong decision' that is now 'one of the reasons for the severe turmoil gripping this market.' Another issue many have pointed out is the political tensions between Tehran and Washington; severe fluctuations in the Iranian currency market particularly intensified after the US withdrawal from the JCPOA. The rise in currency prices has continued alongside increased verbal attacks from US and Iranian officials. Developments in the currency and gold markets have also been reflected in international media. Reuters, referencing the return of US sanctions against Tehran, noted that the rial has lost nearly half of its value against the dollar in the past four months. Officials from the Trump administration have stated that the Islamic Republic spends its national income on groups and governments it supports instead of investing domestically. Mike Pompeo, the US Secretary of State, recently likened Iranian officials to a 'mafia network' during a speech. Tehran has criticized these statements and has filed formal complaints in some cases. Economic developments in Iran over the past months have led to protests across the country, many of which have included strong political slogans against senior Iranian officials and the country's presence and activities in other regional countries.