Iran rial gains as central bank cancels cheaper rate for dollar

The Iranian currency appreciated in unregulated trading after the central bank canceled its fixed, subsidized rate for the dollar.

The rial strengthened to 33,400 to the dollar at 11 a.m. in Tehran from 33,850 on July 2, marking a 1.3 percent gain, according to rates compiled by Daily Rates For Gold Coins and Foreign Currencies, a Facebook page used by businessmen based in Iran and abroad.

Iran’s currency has appreciated 8.5 percent since the day before the June 14 presidential election that made Hassan Rohani the country’s new head of state. Iran’s central bank posted an official exchange rate of 24,777 rials a dollar on its website today, replacing the fixed rate of 12,260 rials, which was removed from the website last week. The central bank is “officially adopting a single rate,” the Tehran-based Etemaad newspaper reported yesterday, without saying where it got the information.

Before this move, the government applied different exchange rates depending on the type of business seeking currency. Importers of essential goods like medicine were given access to currency at lower rates than those bringing in less-essential products. Ordinary Iranians purchase the dollar on the unregulated market at more expensive rates.

Rohani, who will succeed President Mahmoud Ahmadinejad next month, has said he seeks to revive Iran’s economy by improving relations with the world and seeking relief from economic and financial sanctions imposed over the country’s nuclear program.

By Bloomberg

 

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