The Central Bank of Iran has imposed tighter restrictions on foreign currency sales after a rush on euros and dollars weakened the rial to a record low of 500,000 against the greenback. As a result, foreign exchange sellers in central Tehran became inundated with customers seeking to purchase their annual allotment of euros before the Iranian calendar year ended. To counteract the issue, the central bank will now allocate €500 for air passengers, replacing a previous policy which previously allowed people to purchase up to €5,000 ($5,324.3) per year.
The new restrictions came into effect on Tuesday and follow successive record declines of the rial against the US dollar since 2018, when the US abandoned the nuclear deal. Public dissent against the country’s leadership is also reportedly increasing.
Currently, talks between Iranian leaders and world powers to ease sanctions on vital oil exports – part of the original nuclear deal – have stalled indefinitely. This has contributed to a sharp rise in inflation over the last year, reaching close to record levels.
Scuffles broke out outside an exchange office earlier this week as people tried to bypass security guards while waiting to purchase foreign currency. In response to the issue, the Russian-inspired interventionist policy adopted by Russia on the rouble has also been implemented in Iran. This involves the regulator holding foreign currency income from heavily subsidized industries, like mining, to support the value of the rial.
These latest moves come as Iran clearly seeks to counteract dissociation from the global economy and to address rising public discontent. Despite the regime’s undoubted political stability, economic unrest and public protests have become increasingly commonplace. Iran’s population is significantly young with an unemployment rate of 30 per cent, with many calling for greater economic liberalisation.
عبدالرحمان زمین پیما
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آرمان جعفری
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