Iran to create parallel currency market to ease dollar fever
IRNA
The Central Bank of Iran (CBI) said Monday it plans to create a secondary currency market to help ease tensions that plunged the rial against the US dollar to a record low.
CBI Governor Valiollah Seif told reporters on Monday that the parallel currency market would be dedicated to selling US dollars to importers of “essential goods” by exporters of non-oil products such as petrochemicals.
Seif said the rate of the dollars would be the same as officially determined by the CBI. News agencies reported that the secondary currency market would be formed within the next week.
The Iranian rial plunged to a record low against the US dollar on the unofficial market on Monday, amid fears of returning US sanctions after President Donald Trump in May withdrew from a deal on Tehran’s nuclear program.
The Iranian rial dropped to 90,000 to the dollar on the country’s black market, despite government attempts to control the currency rate.
The fall of the national currency has provoked a public outcry over the quick rise of prices of imported consumer goods.
Grand Bazaar in calm
A group of businesspeople at Tehran’s Grand Bazaar shut down their businesses on Monday in protest.
Ahmad Karimi Esfahani, the secretary general of the Islamic Society of Tehran Guilds and Bazaar, said the protesters “chanted economic slogans in protest at the existing [economic] conditions, as a result of which a large group of other businesses were shut down on security grounds and to prevent possible robberies.”
He added that the situation in Tehran Grand Bazaar is calm now and the shop owners are opening their shops to resume activities, but this does not mean that their rightful demands have been met.
“We had repeatedly warned the government that it must shore up its economic team, but now we have come to the conclusion that this team must change,” Esfahani said.
Such protests are a warning to the government, the official said, expressing hope that the government would pay attention to them.
The government of President Hassan Rouhani has struggled to curb the economic problems. A government-set exchange rate of 42,000 rials to $1 has quickly been surpassed in the black market.
Fars news agency reported on a protest in front of the parliament on Monday, which it described as shopkeepers asking “lawmakers to stop rising prices.”
Online videos showed police confronting protesters, with security forces firing tear gas at them and charging into the crowd.
Videos posted to social media showed protesters at the bazaar heckling shopkeepers who refused to close, shouting in Farsi: “Coward!”
Also on Sunday, merchants at the mobile phone shopping centers Aladdin and Charsou in central Tehran protested against the rapid depreciation of the rial by shutting down their shops.
A video posted on social media showed protesters marching and chanting “strike, strike!” The footage could not be authenticated independently by Reuters.
Hours later, Information and Communications Technology Minister Mohammad Javad Azari-Jahromi said on Twitter that he visited the protesting merchants.
“I will try to help provide hard currency for (mobile) equipment (imports),” Azari-Jahromi wrote, adding: “The merchants’ activity has now gone back to normal.”
Some of the US sanctions against Iran take effect after a 90-day “wind-down” period ending on Aug. 6, and the rest, most notably on the petroleum sector, after a 180-day “wind-down” period ending on Nov. 4.
The sanctions would include a universal ban on Iran over buying or acquiring US dollars as well as restrictions over purchases of crude oil from the country and investing in its oil sector projects.
Fighting US economic war
