September 5, 2018 / 8:08 AM / 18 days ago

Iran rial edges up following record low against dollar

DUBAI (Reuters) - Iran’s rial recouped most of its losses after hitting a record low against the dollar on Wednesday on the unofficial market, foreign-exchange websites reported, with the economy facing pressure from the reimposition of U.S. sanctions.

Iranian rials are seen at a currency exchange shop in Baghdad, Iraq August 8, 2018. REUTERS/Khalid Al-Mousily

The rial has lost about two-thirds of its value this year because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians. Many fear Washington’s pulling out of a 2015 nuclear deal and renewed U.S. sanctions will cut into Iran’s exports of oil and other goods.

A set of U.S. sanctions targeting Iran’s oil industry is due to take effect in November.

The dollar was being offered at 140,000 rials, compared to the record low of 150,000 rials earlier on Wednesday, according to the website Bonbast.com, which tracks the unofficial market. The website bazar360.com quoted 139,000. Mesghal.online gave an exchange rate of 141,940.

The currency had traded at about 138,000 rials on Tuesday, compared to approximately 128,000 on Monday.

It was not immediately clear whether Wednesday’s rebound was due to an injection of hard currencies into the market by the government, despite a speech by Central Bank governor Abdolnaser Hemmati on Saturday in which he cautioned against using foreign exchange reserves for that purpose.

Last week, Iran’s parliament sacked the minister of economic affairs and finance, the latest in a continuing shakeup of top economic personnel. In early August, lawmakers voted out the labor minister and in July President Hassan Rouhani replaced the central bank governor.

Protests linked to the tough economic situation erupted last December, spreading to more than 80 cities and towns and resulting in 25 deaths.

Sporadic protests, led by truck drivers, farmers and merchants in Tehran’s bazaar, have continued since then and have occasionally resulted in violent confrontations with security forces.

Reporting by Dubai newsroom; editing by Larry King, William Maclean

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