Iran’s economy is still suffering, even after drastic measures were taken to put restrictions on dollar trading.
A week ago, the Central Bank of Iran (CBI) imposed tough measures to try and restore the Iranian rial’s value. The measures were based on open market exchange rates.
The rate imposed last Tuesday by the Iranian government was IR 42,000 to the US dollar. It warned that anyone who exchanged currency at any other rate would risk prosecution. Just before the new rate was imposed, the rate being used was IR 61,000 on the open market – a drop of almost a third since the beginning of the year and 22 per cent since the beginning of April.
Banks have no option but to use the government-imposed rate, but it has been reported that some dealers are using unofficial rates putting the value of the country’s currency lower than the official rate.
When restrictions were put in place for dollar trading, other currencies also saw a similar pattern emerge. The euro, Swiss franc and British pound all rose sharply against the Iranian currency when the dollar restrictions were imposed. Although the rates settled in the days following the government-imposed restrictions, they are still trading higher than before.
Economic experts are concerned that there will be a currency shortage despite the Iranian regime’s assurances that this would not happen. On the say before the restrictions were put in place, Es’haq Jahangiri – the first vice president – said that the people should not be concerned about currency shortages because all currency will be supplied by the Central Bank of Iran, all of the banks that it controls and also the country’s bureaux de change.
Yet, it appears that the assurances may have been premature because there are numerous reports of private money changers in the country not selling dollars or other foreign currencies because they do not want to do so at an uneconomic rate. They are apparently waiting to see what the government will decide to do next.
The uncertainty and changes taking place in the currency markets in Iran is having a major effect on the Iranian economy as a whole. Imports and exports are affected and there are fears that the people could take to crypto currencies because of the market restrictions.
The economic situation in Iran is also affected by the uncertainty of the nuclear deal. The 2015 Iran nuclear deal was put in place to curb the nuclear threat posed by the Islamic Republic. Iran benefited from the lifting of numerous crippling economic sanctions but the regime has done nothing but fund terrorism, fundamentalism, conflict in the region and of course support the Syrian president Bashar al Assad.
US President Trump has warned that he will pull the United States out of the nuclear deal if the agreement is not strengthened. With the changes in his administration, many believe that the US will very soon exit the deal meaning that economic sanctions could be reimposed.
Source » ncr-iran