Demand for the US dollar has gone down if not dried out in Iran’s foreign currency market. That’s why the low rate for the greenback and other basket currencies has surprised many. The latest slide has been triggered by a government move to supply more dollars to the importers of basic goods at a special rate.
It’s a far cry from when Iran’s currency traded at record levels in the unregulated open market. The dollar’s plunge started when the Central Bank opened an exchange center few weeks ago to stabilize the market. The center now offers discount from the market rate to the importers of basic goods.
According to Iran’s minister of economic affairs and finance, the sharp fluctuation is not a technical move. He says the foreign exchange market will remain stabilized and the listed price of the greenback in the open market may soon be close to that listed at the new exchange center.
The sharp rise in the value of the US dollar has pushed up prices of goods and services in recent months, which led to the criticism of the government by some political currents, including the Parliament. But with the calm returning slowly to the market, Minister Hosseini says the foreign exchange rate will not adjust sharply in the remaining months of this year, because both foreign direct and indirect investment inflows also continue to show positive signs, contributing to the buildup in business confidence.
