![]() "And the rush we saw in the last three weeks - the purchase of foreign currencies, of dollars, euros etc. "Currency markets are the most sensitive markets in picking up signs about confidence in the markets of people, of foreign investors, about the state of the economy," Emadi says. He warns that the recent runs on the rial could herald the first of a series of currency crises as confidence in Iran's economy evaporates. Mehrdad Emadi, a London-based economic consultant, says the dollar has risen as Iranians have sought to buy it as a "safe haven" currency because of fears about Iran's economic future. ![]() Many in the West suspect the program is aimed at producing a bomb, but Iran insists it is peaceful. Congress, and the European Union - all in an effort to persuade Iran to curb its nuclear program. Iranian banks have been targeted in sanctions by the UN Security Council, the U.S. "Not only Iranians, but any community would be upset to see frequent changes and instability in foreign exchange in relation to their country and its economy," Amir said. "The government has contrived this situation to raise foreign exchange prices."Īnother resident, 49-year-old Amir, told Reuters that the plunging rial raised serious questions about Iran's economy. dollar and in foreign exchange are in the hands of the government," Javad said. One Tehran resident, Javad, told Reuters he thought the government had deliberately raised the price of the dollar. Some traders have blamed the government for failing to stabilize the exchange rate. "Many businesses have now stopped trading until the prices stabilize. That is why we couldn't trade at all," Tajik said. "The bazaar was closed for about a week having been hit with fluctuations. One currency trader, Mehdi Tajik, said some businesses had closed their doors because of currency fluctuations. ![]() "The rise in the currency rate is representative of economic tensions," read one headline in the "Siyasat-e Rouz" newspaper, a conservative daily. The rising dollar triggered a spate of dramatic newspaper headlines reflecting renewed speculation about the state of the economy. ![]() He urged Iranians not to flee the rial to buy foreign currencies or gold, insisting that the bank was not facing a hard-currency shortage. The Central Bank's governor, Mahmoud Bahmani, pledged on September 30 that the rial would return to what he termed a "normal" level of 10,600 to the dollar this week. The retail exchange rate was reportedly 10,900 rials to the dollar today - higher than the 10,700 rials the Central Bank of Iran said a dollar would buy. Some currency traders in Tehran reportedly stopped selling dollars in the face of long lines gathering to buy them. On September 29, the rial was 12,500 to the dollar a week earlier, a dollar was worth 10,500 rials. currency soared among businessmen and ordinary people. With the economy already straining under the effect of international sanctions, the rial declined 13 percent against the dollar last week as demand for the U.S. Doubts about Iran's long-term economic prospects have intensified amid a slump in the value of the national currency, the rial, against the U.S. ![]()
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