Iran today sought to reverse a collapse of its currency by imposing a fixed dollar rate, days after protests erupted over the rial’s plunge, according to money changers who were refusing to comply.
The order came as ordinary Iranians struggle with growing economic problems that have caused a big jump in daily prices.
“We received an order from the Money Changers’ Association (under the control of the Central Bank) telling us to buy the dollar at 25,000 rials and sell at 26,000,” one exchange bureau employee said.
“Nobody is selling at this price and we are not trading,” he said.
The bureaux in the central Ferdowsi area of Tehran had opened for the first time since Wednesday’s protests, in which scuffles broke out between police and stone-throwing individuals.
Sixteen exchange market “disruptors” were arrested, according to prosecutors.
The dollar rate being imposed today sought to strengthen the rial by 25 per cent after it plunged 40 per cent in value this week to around 36,000 in trade on Wednesday.
But with licensed exchange bureaux baulking, illegal money changers walking in the street were looking to step in at a whispered rate of at least 30,200 rials to the dollar.
In the nearby Grand Bazaar — a historic maze of shops whose owners collectively enjoy political influence — stalls were also reopened. But gold coin vendors were refusing to sell because, they said, the currency market was still too volatile.
President Mahmoud Ahmadinejad has put the blame of the currency collapse on Western economic sanctions.
But his hardline critics say the fault mostly lies with the monetary policies of Ahmadinejad’s government.
The US government, which is leading the sanctions, has also pointed the finger at Iran’s economic management, but said sanctions relief could quickly occur if Tehran curbed its disputed nuclear programme.