DUBAI Oct 3 Iran is working to shrink and
eventually eliminate the free market in its tumbling rial
currency, the economy minister was quoted as saying amid signs
that foreign exchange trade outside a government-sanctioned
centre was drying up.
"The unofficial currency market will be gathered up,"
Shamseddin Hosseini was quoted as saying by the Mehr news agency
"The foreign exchange centre is being completed step by
step, and its development will eventually lead to the
elimination of the tricksters' market."
Hosseini was speaking after the rial plunged to a record low
against the U.S. dollar on Tuesday, losing about a third of its
value in a week and exposing President Mahmoud Ahmadinejad to
accusations in parliament that he was not competent to manage
Western sanctions imposed over Iran's controversial nuclear
energy programme have slashed its export earnings from oil,
giving the central bank less firepower to support its currency.
Panicking Iranians have scrambled to buy hard currencies,
pushing down the rial.
The rial hit a record low of around 37,500 to the dollar in
the free market on Tuesday, from about 24,600 just eight days
earlier, foreign exchange traders in Tehran said.
On Wednesday, Mehr reported the free-market rate had opened
at 36,100. But traders in Tehran did not respond to telephone
calls from Reuters and there were signs that they had halted
The website of SarafiJalali.com, a Tehran-based
moneychanger, said: "To comply with the policies of the Central
Bank of the Islamic Republic of Iran, and to help organise the
currency market of Iran, Sarafi Jalali for now will not announce
any rates. Subject to permission from the central bank, the
announcement of a new rate will be made." It did not elaborate.
A message on the website of Mazanex, which provides
real-time rial prices, read: "Unfortunately access to this site
and several similar sites has been closed."
Several foreign exchange traders contacted by Reuters in
Dubai, a major centre for business with Iran, said they were no
longer quoting the rial because they had lost contact with their
counterparts in Tehran.
The rial has been falling for over a year and has lost about
two-thirds of its value since June 2011. In an effort to
stabilise the currency, the government last week launched an
"exchange centre" to supply dollars to importers of basic goods.
Initially at least, the effort failed; according to a
central bank statement, the centre supplied only $181 million in
its first week, not nearly enough to satisfy demand.
But Hosseini said on Wednesday that authorities would
continue using the centre in order to replace the volatile free
market, which the government says has been manipulated by
About $100 million per day is now traded on the
government-backed centre, Hosseini said.