The sharp rise in Iran's open-market exchange rate has prompted the central bank to issue a public warning. In a statement published by Ettelaat, the bank said it was monitoring the currency market constantly and that "the timing, volume and method of intervention will be determined according to market conditions, the needs of the economy and the adequacy of reserves."

The bank argues that the current level of the rate "is not fully consistent with the economy's fundamentals." According to the statement, much of the gap stems from uncertainty, psychological pressure and expectations. Recalling similar episodes in 2018 and 2020, the bank said: "Our goal is not to defend a specific rate, but to prevent unfounded fluctuations from becoming entrenched."

According to the report, which cited Tejarat News, the dollar started the first week of the month of Mehr at 232,000 tomans. By the end of the week, it had climbed to around 259,000 tomans in after-hours trading, a gain of more than 10% in a week. The Emami gold coin stands at about 263 million tomans. The fall in the price of gold per ounce did not halt the rise in the domestic market.

Measures taken

Hamshahri lists three steps taken to rein in the exchange rate:

  • Cash FX supply: The central bank plans to sell up to $2 billion in cash. In the first phase, $1 billion was made available through selected bank branches and exchange offices. Citizens aged 18 and over can buy up to $10,000 with their ID cards.
  • Crackdown on online price setting: Of 51 pages found to be spreading fake exchange rates, 24 were seized by court order. Tether trading was banned during nighttime hours. A major cryptocurrency exchange removed its price listings "until further notice."
  • Operation against "market disruptors": The economic security police detained 10 people linked to the leader of a network trading currency in futures and on paper, and froze 5 rented bank accounts. According to a law enforcement spokesman, the first suspect's trading volume was 240,000 billion tomans.

How the Persian press covered it

The hardline Kayhan turned the rise in the rate into political criticism of the government: "Dollar in the 260,000 channel, while the gentlemen are busy kissing the sheikh of sedition!" The headline targets contacts between government circles and an unnamed political figure. Hamshahri presented the situation in a framing of "America's all-out economic war against Iran," calling it "war on the currency front."

Context

In Iran, 1 toman equals 10 rials, and market prices are usually quoted in tomans. There has long been a large gap between official exchange rates and the open-market rate. The indicator the public follows is the open-market rate.

For information only; not investment advice.