DUBAI Jan 22 The Iranian rial has dropped
sharply on the open market since Sunday on speculation the head
of the country's central bank could be sacked in a row over his
performance that has exposed the country's political faultlines.
Reuters contacted currency traders who offered the rate of
35,400-550 to the dollar on Tuesday morning, little changed from
Monday but down some 8 percent from Sunday when it stood at
Bank governor Mahmoud Bahmani - appointed by President
Mahmoud Ahmadinejad in September 2008 - has faced strong
criticism of his management of the rial following a slump in the
currency last September that saw it lose 40 percent of its value
in a matter of days.
He also faces claims of involvement in the "midnight
withdrawal" affair of March 2012, when the central bank withdrew
hundreds of millions of dollars from commercial banks without
On Monday, Iran's Supreme Audit Court ruled that Bahmani
should be dismissed from his post, news which appeared to send
the rial into a new dip.
In what appeared a related move, Bahmani offered to resign
on Sunday saying he wanted to retire but this was not accepted
Also on Sunday, parliament voted to investigate the central
bank over its response to last year's currency crisis.
Analysts say the president cannot afford to show signs of
weaknesses that could be used by his political rivals in
parliament to undermine his position. Members of the Supreme
Audit Court are recommended and approved by parliament.
The court ruling - which is not a binding decision on the
government - was issued because of Bahmani's failure to attend a
hearing and explain the reasoning behind the March 2012
withdrawals, Mehr news agency reported.
A separate report on the state news agency (IRNA) said that
the governor had 20 days to appeal against it.
The central bank has said no such ruling was issued by the
court and denies charges of any wrongdoing over the withdrawals.
Legislators have accused the central bank of economic
mismanagement and failing to provide the market with enough
dollars to meet demand, helping to drive down the rial.
To stem the September plunge in the currency, the government
used security forces to arrest currency dealers and attempted to
impose its own exchange rates.
The crackdown has made it difficult for many dealers to
continue trading. Those that continue risk arrest and
imprisonment as well as losses because of unpredictable swings
in the market rate.