FATF ruling pushes Iran’s rial to fresh lows in unofficial trade

Press TV – Iran’s rial has hit new lows in unofficial trade after a decision by the Financial Action Taskforce (FATF) to blacklist the country although critics insist the decision would fail to negatively impact the economy.

Reports on Saturday from an unofficial currency market in downtown Tehran showed that the rial was weakening against major international currencies.

Rial closed at 156,000 against US dollar on Saturday, a decline of more than 13 percent compared to final hours of trade on the last day of the week in Iran on Thursday.

The plunge is the deepest to come in months for the rial. The currency was hovering around 110,000 against the greenback late last year.

It came a day after an FATF board meeting in Paris decided to end suspensions granted to Iran’s blacklist status over money-laundering and terrorism financing.

Iranian authorities have dismissed the ruling as politically-motivated and not corresponding to the realities of the banking system in the country.

A senior banker highlighted the fact that major Iranian banks had already been cut off from the global banking system due to the American sanctions on the country, saying the FATF ruling would fail to further deteriorate the situation.

“We had no ties to the foreign banks and thus, this FATF decision would have no impact on the banking performance,” said Mahmoud Saffarzadeh from Iran’s Tejarat Bank.

Others, however, expressed concerns that the ruling would cause more isolation for Iran in the global banking system.

The official IRNA news agency, which is run by the administrative government of President Hassan Rouhani, called on higher legislative bodies in the country to move to approve the remaining FATF conventions and allow the Paris-based organization to swiftly remove Iran from its blacklist.

Certain members of Iran’s Expediency Council, which has approved all 41 but two of FATF recommendations, have opposed them fearing they might be misused by hostile governments like the US to pressure Iran.