Currency at New Low; Iran's CB Says Will Defend Rial

EghtesadOnline: Major currencies soared in Tehran on Tuesday amid new concerns among market participants about a decision by the Financial Action Task Force on Iran by the weekend.

News ID: ۷۴۹۷۳۸

19 February 2020

The US dollar was worth 14,440 rials in Tehran’s open market, up 2,500 rials compared to Monday’s close. One Euro bought 15,600 rials, according to Financial Tribune.

Currency prices have been rising over the past several days as the FATF, the international money-laundering watchdog, gets ready to decide whether or not to put Iran on its dreaded blacklist.

This issue has created a negative climate in financial markets in Iran, creating new opportunity for avaricious currency dealers and middlemen to gouge prices and make an extra buck as has been the case during the past decades.

In response to the new bout of fluctuations in the currency market, the central bank boss Abdolnasser Hemmati on Tuesday reemphasized that currency prices in Iran won’t be affected by the FATF decision.

Iran is currently on FATF's watch list and was given the last and final deadline last October to comply by FATF rules or face consequences.

The FATF plenary and working group meetings started on Feb 16 and will end on Feb 21 in Paris.

Hemmati warned currency traders that the “CBI is closely monitoring the currency market.” The warning is seen as a signal to currency traders that the CBI will soon intervene to regulate rates.

The Central Bank of Iran usually intervenes in the currency market during sharp currency volatility.

Bank-based moneychangers too increased prices at the same pace with rates in the open market on Tuesday to avoid arbitrage.

The moneychangers sold the dollar for 142,000 rials, up 2% compared to the day earlier  and the euro  was worth 154,000 rials -- up 2%.