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Iran: Foreign Exchange Rules Tightened by Central Bank

Source: Radio Zamaneh; Photos by Mojtaba Heidari, Mehr News Agency

Iran's Central Bank has announced that all money-exchange services in the country must trade foreign currency only within three to five percentage points of the Central Bank rate.

People waiting outside currency shops on Saturday to buy the currency at the official rate.
According to khabar online, while the shops have changed the rates, no trading is happening.

The new rule is an attempt to protect the spiraling national currency, which has plunged in recent weeks, causing the exchange rate to double.

In response to the news of Western sanctions against Iran's Central Bank, many Iranians appear to be flooding the market, trying to convert their Iranian cash into foreign currencies.

Black market traders are still active.
According to khabar online, Dollar was being traded as high as 1800 tomans on Saturday

Similar fluctuations have also hit Iran's gold market.

The dollar has always been traded in Iran's open market at a much higher rate than what's officially posted by the Central Bank. The government is now trying to prohibit this practice in an attempt to maintain a single rate of exchange for foreign currencies.

Some are blaming black market traders and some politicians for the currency turmoil

Last week, President Mahmoud Ahmadinejad took a policy U-turn by approving an increase in bank interest rates. Mahmoud Bahmani, the Central Bank chief, announced yesterday that "foreign currencies will have one single exchange rate, and as of Saturday, the dollar can only be traded at 1,226 toumans."

The dollar, which had reached well over 2,000 toumans on the open market, reportedly fell to 1,700 toumans yesterday after the announcement by the Central Bank.

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