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Iran on 9 April announced the unification of its official and free market exchange rates for the rial in a surprise, desperate attempt to halt the free-fall in the value of its currency. This has now plummeted to an all-time low of around $1=IR60,000, compared to $1=IR37,700 in mid-2017.
The rial’s plunge was driven by geopolitical fears over the possible US withdrawal from the nuclear accords and resultant tightening of sanctions that have eased since January 2016.
Following an extraordinary cabinet meeting chaired by President Hassan Rohani, First Vice President Ishaq Jahangiri told the official state media that the US dollar will be sold at IR42,000 only as of 10 April in both the official and free markets for all business activities, assuring people “that their currency needs would be met.” He warned that trading dollars at any other exchange rate will be illegal and considered an act of smuggling and assured the people that “the country was attracting billions of dollars in foreign financing.”
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