Iran ar­rests cur­rency traders as rial col­lapses

Iran Daily - - National -

Ira­nian po­lice ar­rested around 100 money chang­ers on Wed­nes­day as they scram­bled to con­tain the de­cline of the rial, which has lost a quar­ter of its value in six months.

A video by state broad­caster IRINN showed dozens of cur­rency hawk­ers, who nor­mally ply their trade across the street from the Bri­tish Em­bassy on Fer­dowsi Street in cen­tral Tehran, be­ing rounded up by po­lice.

Iran’s cur­rency has col­lapsed from 38,400 ri­als to the dol­lar in July to a record low of 48,400 on Wed­nes­day.

Tehran’s chief of po­lice, Gen­eral Hos­sein Rahimi, told the me­dia that 10 for­eign ex­change out­lets had also been shut down and 16 had re­ceived of­fi­cial warn­ings.

“Driven by greed, the de­tainees were at­tempt­ing to dis­rupt the mar­ket and eco­nomic or­der,” Rahimi told Fars News Agency. “The ju­di­cial sys­tem should firmly pun­ish them.” Ag­gres­sive pur­chases of dol­lars by cur­rency spec­u­la­tors ap­pear to have sped up the rial’s de­cline. Cen­tral Bank Gover­nor Vali­ol­lah Seif warned spec­u­la­tors last month not to bet against the cur­rency but that did not change the trend.

Iran’s 2015 nu­clear deal with world pow­ers, which lifted many in­ter­na­tional sanc­tions, had raised hopes that the cur­rency would re­gain its lost value.

The big driver was the de­ci­sion by the Cen­tral Bank to lower in­ter­est rates in Septem­ber.

Iran’s banks had of­fered sky-high rates in re­cent years – of­ten over 20 per­cent – as they com­peted for de­posits against many in­di­vid­u­als and busi­nesses who pre­fer to keep their money in dol­lars or real es­tate.

With many banks look­ing shaky, Iran’s Cen­tral Bank de­creed that they could no long of­fer in­ter­est rates above 15 per cent – a move which traders say pushed many peo­ple back to­wards the dol­lar.

AFP and Reuters con­trib­uted to this story.

TAS­NIM NEWS AGENCY

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