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Iran manipulating rates....

Iranian Currency's Sharp Fall Sparks Concerns, Criticism

- Iran's currency fell to an unofficial record low against the U.S. dollar on December 26, extending a dramatic drop in the rial's value in recent months that has prompted concerns about the country's economy. The street value of the rial reportedly hit 41,500 to the dollar on December 26, compared to 35,570 in September and beating the previous low of around 40,000 recorded in 2012. - 12/27/16

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High dollar rates spark criticisms in Iran

Source: Press TV

The runaway dollar has sparked serious concerns in Iran over what many believe could eventually prove costly for a country which has been planning for months to reap the benefits of the removal of the sanctions. 

Iran-currency-falls-to-record-lows-by-iran-news.jpg

The surge of the greenback into the channel of above 40,000 rials prompted criticism against the government of President Hassan Rouhani in the media as was evident from the front pages of local newspapers on Tuesday.

Sharq newspaper - affiliated to the reformist camp - called on the government to pump dollars into the market to help ease the rising rates. 

It questioned why Rouhani's financial team was failing to do so, suggesting that the government was reaping the benefits of Iran's rial tumbling to a record low against the dollar. 

"The government [of President Rouhani] is benefiting from the high rates of the dollar and is preventing the Central Bank of Iran (CBI) from interfering to control the market," it wrote. 

"If the government fails to control the rate of the dollar, it will lose its greatest achievement [the stabilization of the dollar rate] at a time when the country is preparing for next year's presidential election."

At the end of trading on Monday, the rial was quoted in the free market at 41,500 to the dollar, weakening from around 41,250 on Sunday and 35,570 in mid-September. Before this month, the record low was about 40,000, hit in late 2012, Reuters reported.

Aftab-e Yazd highlighted remarks by unnamed CBI officials as well as Mohammad-Baqer Nobakht, the government spokesman, who said that the recent rise in the dollar rates was "temporary" and that it would soon subside.

"Around the same time each year when the world is preparing for the New Year holidays, there is a surge in the rates of the dollar," the daily quoted Nobakht as saying, highlighting his suggestion that the dollar exchange rate was rising owing to "psychological factors."  

"This is a result of psychological issues. The rise of 1,000 rials in the rate of the dollar is not acceptable to the government and hopefully the dollar will ease."

Pedram Soltani, one of the country's top merchants, told Arman newspaper that the slide in rial could hurt Iran's industrial production. 

"The rapid rises in the rates of the dollar ... will increase production costs," said Soltani, who is also the first vice president of Iran's Chamber of Industries and Mines.

It is for the same reason that it is incumbent on the CBI to gradually increase the dollar exchange rate in tune with the inflation, he added. Any failure to do so would enable the dollar to gather force and release its energy into the market - what is today blamed for the recent surge, he warned. 

Meanwhile, Reuters in a report put the blame for Iran's currency fall on fears over the potential risks to Iran's economic plans once US President-elect Donald Trump takes office.

Reuters has specifically highlighted Trump's promises to undermine a landmark nuclear deal that Iran sealed with world powers last year - what eventually led to the removal of some economic sanctions against the country. 

Ebtekar newspaper also echoed warnings that the slide in the national currency value could undermine Rouhani's popularity ahead of next year's election. 

When Rouhani took office, the dollar had already increased by 298.5 percent during the tenure of his predecessor Mahmoud Ahmadinejad (2005-2013), it wrote.

Rouhani was able to stabilize the currency market despite severe impacts of the sanctions as well as low oil prices.

"It was expected that the government would continue the previous trend in face of difficulties now that it is in the last year of its tenure." 

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Bahar Azadi gold coin sold for 11.8 million rials ($284.3) on Tuesday, up by 2.6% at 300,000 rials from the previous day.

The US dollar’s exchange rate also climbed 500 rials, reaching 41,500 rials to the dollar, according to the Association of Bureaux de Change Operator's website.  

The British pound was traded for 50,100 rials on Tuesday, approaching its pre-Brexit rate in Tehran's market. GBP lost 3,000 rials back in June when Britons voted in favor of leaving the European Union.

Samad Karimi, the head of Export Department at the Central Bank of Iran, has listed five main reasons for the rally in forex rates, adding that the central bank is investigating the source of recent hikes in the market.

“Higher demand for overseas trips, the growth in Emirati Dirham’s rate [which is important for Iranian imports] and increasing activity of middlemen in the currency market are the main causes of recent swings in forex rates,” he said during a televised debate broadcast late Monday.

The Emirati dirham changed hands for 11,370 rials on Tuesday. It has been rising since early November, when it was at around 9,600 rials. The currency is widely used by importers who are also bracing for the Iranian New Year (starting March 21, 2017) when Iranians head for holidaying in the UAE.

“A drop in gold prices also impacted forex rates, as people prefer to purchase hard currency rather than gold,” he added.

Karimi noted that it is not possible to set a specific date for implementing plans for the unification of forex rates.

Central Bank of Iran Governor Valiollah Seif had earlier announced plans to end the country’s dual exchange rate regime by the end of the current Iranian year and let the rial float against other currencies in a “managed” way.

In the last 10 years, Iran has seen the rial go from 9,200 to 41,500 for $1, a depreciation of some 450%. Much of that collapse came in 2012 over the country's nuclear program, when the US banned the world's banks from taking part in Iran's economy and the European Union imposed an oil embargo.

However, under the 2015 nuclear deal between Iran and world powers, international sanctions against the country were lifted in exchange for it limiting its uranium enrichment. Since then, Iran has succeeded in increasing oil production to regain its lost market share while simultaneously signing deals worth tens of billions of dollars with airplane manufacturers Airbus and Boeing.

But the rial, initially buoyed by the accord, has now fallen. This was met by mixed reactions from business leaders, with many blaming the government's forex controls to keep the rial overvalued for the sudden shocks.

Rate Unification in Limbo

Pedram Soltanifar, the deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture, said the dollar’s bull run is very dangerous for the economy.

He believes that the government should have started to limit the number of goods receiving subsidized forex since a year ago.

“The unification of foreign exchange rates is now more costly for the government. I think the rate would be unified in the first half of the next fiscal year,” he added.

Emami Gold Coin also experienced a 3% growth in price on Tuesday and was sold at 12,208,000 rials, according to Tehran Gold and Jewelry Union's website.

The growth in gold coins’ prices was not surprising.

Mohammad Keshti-Arai, the head of TGJU, also predicts a surge in gold prices in the domestic market. He believes that domestic markets are not much impacted by international trends, as they are by forex rates, especially in the coming weeks.

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1 hour ago, screwball said:

He believes that domestic markets are not much impacted by international trends, as they are by forex rates, especially in the coming weeks.

 

so what's happening in the coming weeks..?

Screwball if I might add something to your question . You posted this 2 days ago......

The greenback's rate reached 41,000 rials on Sunday, recording a new all-time high.

Subsequently, Governor of Central Bank of Iran Valiollah Seif said banks should reclaim their “historic and fundamental” role in the foreign exchange market......................

 

 

In a statement on Saturday, CBI informed businesses to approach the banking system for purchasing foreign exchange, noting that banks have been permitted to trade foreign currencies at the market rate since July..................................................

The move was aimed at helping the central bank implement its plans for unification of foreign exchange rates by the end of the Iranian fiscal year.

((((((((But the new call comes after continued growth in the US dollar's exchange rate against the rial in recent weeks.))))).Looks like there are calls to combine the dual exchange rates in the coming weeks instead of March 20. The End of the Iranian fiscal year  ???

 

 

 

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1 hour ago, gixxerfrog said:

When are these articles about the rate floating,  I know they have been saying that (along with other things)  just hope these are recent (very recent talk) 

gixxer ................I hope this helps............

Bahar Azadi Gold Coin sold for 11.8 million rials on Dec. 27. (Photo: Sepehr Arefmanesh)
  1. Economy
  2. Business And Markets
Wednesday, December 28, 2016

Gold Prices Higher in Tehran Market as Dollar Continues Rally

Higher demand for overseas trips, the growth in Emirati Dirham’s rate [which is important for Iranian imports] and increasing activity of middlemen in the currency market are the main causes of recent swings in forex rates
 
 

Bahar Azadi gold coin sold for 11.8 million rials ($284.3) on Tuesday, up by 2.6% at 300,000 rials from the previous day...................(within the same article as follows).....................

The Emirati dirham changed hands for 11,370 rials on Tuesday. It has been rising since early November, when it was at around 9,600 rials. The currency is widely used by importers who are also bracing for the Iranian New Year (starting March 21, 2017) when Iranians head for holidaying in the UAE.

“A drop in gold prices also impacted forex rates, as people prefer to purchase hard currency rather than gold,” he added.

Karimi noted that it is not possible to set a specific date for implementing plans for the unification of forex rates.

Central Bank of Iran Governor Valiollah Seif had earlier announced plans to end the country’s dual exchange rate regime by the end of the current Iranian year and let the rial float against other currencies in a “managed” way...........(December 28th 2016)

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50 minutes ago, blueskyline said:

I'm becoming very confident we will see something in the hours after midnight of New Years Eve . 

Either this or I'm also sensing that they're planning to move even faster before Trump gets sworn into office next month......jmho. :twothumbs:

How or where we can monitor this change that's about to take place, what reliable sources you all would be using?  :shrug:

Brother Screwball, will you be monitoring things from some type of forex site?  :huh:

I'm now debating whether or not to hold off drinking on New Year's Eve lol :cheesehead:......oh man....:praying:

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2 hours ago, blueskyline said:

I'm becoming very confident we will see something in the hours after midnight of New Years Eve . 

I am confident but will never put a timeframe unless they say...so for me anytime in Jan and feb I will be happy, have learnt with Dinar that timeframes leads to dissapointment....lol.. they have said by March and that's a time frame I am going with! 

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1 hour ago, Freedomwish said:

Either this or I'm also sensing that they're planning to move even faster before Trump gets sworn into office next month......jmho. :twothumbs:

How or where we can monitor this change that's about to take place, what reliable sources you all would be using?  :shrug:

Brother Screwball, will you be monitoring things from some type of forex site?  :huh:

I'm now debating whether or not to hold off drinking on New Year's Eve lol :cheesehead:......oh man....:praying:

Cbi site and any currency converter.....I receive automatic updates from xe.com

 

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2 hours ago, gixxerfrog said:

Awesome!!! Thanks blue I still would like to know what exactly is going on with the renaming of their currency.  Guess time will tell. 

It's irrelevant until it becomes law and it hasn't passed the majlis as yet....the law to remove zeros was presented same time as banking reform bill now it's reported that the banking reform bill has passed, but no news of the other. From news reports they vote bill on a Sunday, and we don't hear until Monday and Tuesday...

 

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4 hours ago, blueskyline said:

Screwball if I might add something to your question . You posted this 2 days ago......

The greenback's rate reached 41,000 rials on Sunday, recording a new all-time high.

Subsequently, Governor of Central Bank of Iran Valiollah Seif said banks should reclaim their “historic and fundamental” role in the foreign exchange market......................

 

 

In a statement on Saturday, CBI informed businesses to approach the banking system for purchasing foreign exchange, noting that banks have been permitted to trade foreign currencies at the market rate since July..................................................

The move was aimed at helping the central bank implement its plans for unification of foreign exchange rates by the end of the Iranian fiscal year.

((((((((But the new call comes after continued growth in the US dollar's exchange rate against the rial in recent weeks.))))).Looks like there are calls to combine the dual exchange rates in the coming weeks instead of March 20. The End of the Iranian fiscal year  ???

 

 

 

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Correct you aware...

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12 hours ago, screwball said:

I am confident but will never put a timeframe unless they say...so for me anytime in Jan and feb I will be happy, have learnt with Dinar that timeframes leads to dissapointment....lol.. they have said by March and that's a time frame I am going with! 

If nothing happens by right after New Year's, I'll continue to keep saying to myself......

By March 20th, 2017 something will happen or nothing at all....just keep the faith!:praying:

By March 20th, 2017 something will happen or nothing at all....just keep the faith!:praying:

By March 20th, 2017 something will happen or nothing at all....just keep the faith!:praying:

So....I guess I'll be getting ready for my whiskey drinks at happy hour later lol - thanks Screwball! :cheesehead:

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