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Eurasia
February 16, 2018 www.intellinews.com I Page 21
Iran clamps down on informal dollar traders as rial slides
bne IntelliNews
Iranian police in conjunction with legal authorities from the Central Bank of Iran (CBI) descended on Tehran’s Ferdowsi St on February 14 to tackle the illegal outdoor trade in dollars.
Police descended on the informal bazaar of mon- ey changers, physically rounding up 90 men and forcing them against the walls of the British Em- bassy compound adjacent to the square, accord- ing to videos on Telegram released by the Islamic Republic News Agency.
Following the clampdown on Ferdowsi St, the CBI announced that it had located and seized the dollar accounts of 755 dealers worth some IRR20tn ($4bn). Among the shutdowns were ap- proximately 10 unlicensed bureaux de change, which did not have permission to trade foreign currencies.
Police are now investigating where the $4bn came from, which is an unusually high amount for traders to hold. Following the arrests, the Tehran Police force said the dollar should come down without the dealers artificially inflating the currency.
The US dollar nearly reached to IRR50,000 on February 13, breaking all previous records. How- ever, as the dollar rose, official dealers in the city said they were no longer willing to sell until the authorities alleviated the issue.
According to the registered Olympic Exchange, the US dollar was trading for IRR48,080 on Febru- ary 15, while the euro increased on the day before to hit IRR61,300, and the pound sterling stood at
IRR70,000. Tehran gold traders, who often track the rate of the dollar, have also seen significant gains in their business.
The continuing decline of the rial comes as sever- al top banking officials including the Central Bank of Iran governor Valiollah Seif said that hawkers should stop hoarding foreign cash and looking to make quick gains. Seif noted that people will lose as the Iranian banking system has plenty of cash to ward off any attack on the currency.
Iran’s IBENA reported that, according to presiden- tial advisor Mohammad Baqer Nobakt, the rise in the dollar is part of a bubble trend and not likely to continue.
Nobakht said in a press conference on the issue, “The price of the dollar has risen, but it is a part of false market requests”, indicating that people buying were hoarding the cash for gain rather than proper usage.
He added “We have no problems in terms of cur- rency, and we do not have a shortage of currency”, adding, “The foreign exchange earnings from our oil and non-oil exports are clear, and our imports are also clear, and this shows that we have no currency shortage at all".
CBI chief Seif told Tasnim news agency that tak- ing a position against the rial would turn out to be a loser's game as he has the authority to pump as much foreign currency into the free market system as he feels is necessary at any point. He added that the rial was likely to rebound in the next few months.