Men take pictures of an exchange shop screen with currency rates, Tehran, October 2, 2018 (Vahid Salemi/AP)

Trying to rescue Iran’s currency from a historic fall, the Rouhani Government promises an economic “breakthrough” in coming days.

The Iranian rial has set more historic lows throughout the spring and summer, falling from 150,000:1 v. the US dollar in March to almost 250,000:1 last month. An injection of up to $1 billion in currency markets brought only a small recovery.

See Iran Daily, June 28: Government Fails to Halt Record-Setting Currency Slide

The head of the Central Bank, Abdolnasser Hemmati, declared on Friday:

We would bring down the exchange price this very day or tomorrow. We will show to the people that the government has never sought to inflate the exchange (rate) to finance its budget deficit.

The announcement and speculation about government action brought the rial back to 215,000:1 v. the dollar.

There has been no sign of a Government plan, but senior officials have told Iranian media of “a major financing scheme with huge implications”.

They did not explain how the scheme would be funded, given a fall of up to 95% in Iran’s oil exports and problems with production, trade, investment, and employment amid long-term issues and US sanctions.

But there is speculation that the Government is betting on a future rise in the oil price with 1-year and 2-year bonds pegged to the figure.

The current price is between $41 and $45 per barrel, having fallen below $25 this spring amid the Coronavirus pandemic.

Hemmati admitted that Iran is suffering from inflation because of the depreciation of the rial. However, he insisted, “This issue will be fixed and we will use all tools to moderate the rate.”