Iran says economic, political factors behind currency instability

Source: Xinhua| 2019-12-10 22:25:42|Editor: xuxin
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TEHRAN, Dec. 10 (Xinhua) -- The governor of Central Bank of Iran (CBI) said a number of economic and political factors led to recent instability in Iran's currency market, Financial Tribune daily reported Tuesday.

Currency prices started rising in mid-November amid heightened uncertainty about Iran's economy, said Abdolnasser Hemmati.

On Monday, the U.S. dollar was traded for 137,000 Iranian rials in the street market in the capital Tehran, showing a 16-percent rise in the value of the dollar against rial from mid-October.

Hemmati said the gasoline rationing scheme in mid-November set off the first spark in the currency price rise which was followed by a wave of social unrest and violence across the country.

"As we all know, this was due to the price shock emanating from the hike in pump prices after which a psychological climate dominated the market," he noted.

The speculation about the estimates and projections in the March 2020-21 budget bill is another drive for the current trend in the forex market, added the central bank's chief.

As for other factors affecting the domestic currency market, Hemmati pointed to the unrest in neighboring Iraq, which temporarily disrupted Iranian exports to the country.

The CBI is doing all it can to restore stability to the currency market "as it has done in the past," Hemmati said.

Since autumn 2018 and after a period of steep volatility in the currency market, the CBI has intervened to balance supply and demand in the market by manipulating currency prices and pushing for disciplinary action to curb harmful speculative activities.

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