Iranians in front of a currency office in Tehran (Vahid Salemi/AP)
Iran’s Central Bank has declared that “all is well” with the country’s currency, even as the rial slides towards its historically-low level.
The rial opened on Tuesday at 177,200:1 vs. the US dollar on the open market, a fall of almost 20% from its level at the start of 2020.
The currency’s all-time low is 180,000:1, set in September 2018 just before the Trump Administration imposed comprehensive sanctions on the Islamic Republic.
Intensive Government intervention propped up the rial, which had been at about 15,000:1 for months before it.
The official rate, provided to importers of essential goods, is about 42,000:1. However, the Government’s subsidy of foreign currency is under pressure because of falling revenues and corruption, with the loss of billions of dollars.
Difficulties have been compounded by the Coronavirus crisis. The Supreme Leader is insisting his slogan “Surge in Production” is fulfilled, prompting the Government’s re-opening of some businesses.
Bank Head: “Stability Can Be Restored”
Central Bank Governor Abdolnasser Hemmati insisted on Monday that foreign currency prices will “return to normal levels”.
He blamed the fall in global oil prices, which has come on top of Iran’s loss of 80% to 95% of its oil exports, for the rial’s drop. However, he said the position was no worse than in summer 2018.
Writing on Instagram, he asserted, “As I said before, the situation is difficult, but the trend is one of improvement which can be managed and stability can be restored.”