Iran’s rial regains footing as government tightens controls

Iran’s national currency rial has recovered against US dollar in a first sign that new government measures to control the exchange market are paying off.

 Iran’s rial traded a months-high against dollar at 118,000 on Tuesday afternoon local time, up nearly 10 percent compared to the same time last week when traders sold each dollar for 130,000 rials.

Reports said people were rushing to the exchange market in Tehran and other cities to sell their dollars.

The Tasnim news agency said the recovery for rial was mainly due to new government measures to control the market.

Rial hit historic lows around 190,000 to the dollar in September, mainly as a result of sanctions imposed by the United States on Iran’s nuclear program.

However, government officials have repeatedly suggested over the past months that there would be a rebound, insisting that the market would only stabilize if the national currency rises to 80,000 to the dollar.

Experts said rial regained footing mainly because the government had successfully minimized the difference between prices in the market and in a system used for collecting the dollars earned from exports.

Reports said the difference between the two markets has been around 10 percent this week, down from a large gap of 40 percent in March.

The governor of the Central Bank of Iran (CBI) said on Tuesday that the country was on the path to rebuild the economy, saying the currency shock was now under control, inflation was down and unemployment rate was declining.

“The CBI does not interfere to set the price of foreign currency as we believe economic and market indicators will decide the natural price of the currency,” said Abdol Nasser Hemmati.

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