Iranians Panic - "Can't Find Dollars" After Government Enforces Currency Controls

Yesterday saw the Iranian Rial crash to a record low 60,000 per USDollar on the unregulated markets, according to Tasnim News agency, having lost more than a third of its value in the last six months.

This prompted an angry response from Iran’s First Vice President Eshaq Jahangiri who said in a statement recorded for state TV and published on its website that enemies of the Islamic Republic and of the government were behind the instability.

As Bloomberg reports, Jahangiri said the sudden decline was “unnatural and unprecedented” because tens of billions of dollars worth of foreign currency had flowed into Iran in recent weeks from the country’s export revenues and this showed that a wider political plot sought to discredit the government of President Hassan Rouhani and foment instability.

It’s natural that our enemies and opponents, especially the Americans, after the nuclear deal was agreed and after Trump took office, have made great efforts to try and present Iran’s economy as turbulent and try to discourage anyone from working with Iran,” Jahangiri said.

And so Iran enforced a rate of 42,000 Rial per USD warning that anyone found selling the dollar at rates higher than 42,000 rials “will be dealt with severely” by judicial authorities and the police, Jahangiri said.

“We do not officially recognize any other rate than this one," he said.

“From tomorrow, any other price that’s offered in the market will be considered contraband, in the same way that illegal drugs are contraband.”

Still, things remain ugly for those holding Rials...

 

“We will certainly use all of the state’s strengths and capabilities in order to, God-willing, steady the market,” government spokesman Mohammad Bagher Nobakht said in a statement shown on state TV. “We accept that this situation is not a good one and it’s against what we want.”

As one would expect, this news prompted widespread concern among Iranians who flocked to exchange offices on Tuesday only to find there were none to buy.

As GulfNews reports, on Ferdowsi Street in central Tehran, home to dozens of banks and currency exchanges, many had hoped to find much cheaper dollars than the day before.

But all along Ferdowsi Street, exchangers were turning hundreds of people away or had signs up saying: “We have no dollars to sell”, while rate boards showed blank spaces for US and European currencies.

“Last night on TV I heard it’s 42,000 so I came here to buy some for my son who is overseas. I’ve checked every exchanger but I couldn’t find any dollars,” said Tahmoores Faravahar, a 71-year-old retired oil sector worker.

Many businesses were forced to halt work amid the uncertainty created over prices and the availability of imported materials.

“After speaking to my usual printer, I’ve had to cancel a project because they weren’t selling anything,” said Payam, a 38-year-old in Tehran who owns a small advertising and publishing company. “I was also planning to advertise for new personnel on Saturday -- I’ve also canceled that plan now.”

Some said this had only created fear and confusion.

“People don’t have hope in the political and economic situation in this country. People are confused and just want to keep their money safe by turning it into dollars.”

One exchange office said it was never clear when the central bank would deliver dollars for them to sell.

“I don’t know why they haven’t come yet today,” he said in the early afternoon. “But the new rate is good. The price was not normal these last few days.”

But this seemed to sum things up well...

“The truth is that the people can’t trust the word of the government that their money will be safe,” said a trader who sold currency on the street and asked to remain anonymous.

One street trader said exchangers would find ways to fiddle the system to get round the new fixed rate, even though Vice-President Eshagh Jahangiri warned this would be considered smuggling.