Page 35 - IRANRptNov21

Strengthening rial driven by rising hopes for nuclear deal revival says Iran’s central bank
The Iranian rial (IRR) on May 5 reached its strongest rate against the dollar on the open market in three months, causing the central bank to deny it was boosting the currency and to say it was gaining on strengthening sentiment for a positive outcome from the ongoing Vienna talks aimed at reviving the 2015 nuclear deal.
By the end of trading, the IRR reached 209,000 versus the USD. The big move, however, came on May 2 when the dollar lost more than 4.5% as the IRR gained by 10,100 rials to reach 219,700.
The greenback further declined to 218,000 rials on May 3, prior to the May 4 religious holiday, when there was no trading, and the May 5 gain. Abdolnasser Hemmati, governor of the Central Bank of Iran (CBI), was quoted by the Financial Tribune as saying the market was responding to “positive expectations” on the potential for the removal of US banking sanctions on Iran and the possible unfreezing by Washington of Iranian FX assets held in foreign banks should the Vienna talks reach a successful conclusion.
The rial has lost more than 70% of its value since May 2018, when Trump abandoned the nuclear accord and introduced a sanctions regime against Iran unprecedented in its scope and economic impact. During the course of the four-year Trump presidency, the rial lost 80% against the greenback.
Valiollah Seif, who served as Iran’s central bank governor for nearly five years until he was fired in July 2018, has been sentenced to 10 years in prison for illegal practices in managing the country’s FX market, judiciary spokesman Zabihollah Khodaeian told state television on October 16.
In the period leading up to ex-US president Donald Trump reintroducing heavy sanctions against Tehran in May 2018, the Iranian rial entered a spiral of depreciation against hard currencies, presenting Seif and colleagues—who have also been sentenced to jail terms—with the need to adopt crisis measures to curb its loss of value. In relation to those measures, Seif was found guilty of “participation in disrupting the country’s financial system through illegal smuggling of foreign currency”.
Iran’s former central bank chief sentenced to 10 years in prison for illegal FX practices
35 IRAN Country Report November 2021 www.intellinews.com