Long queues of dollar buyers outside Tehran exchange shops as the rial’s value plummets against the dollar

As the exchange rate continues its upward trend in Iran’s market, crossing the 5,600 toman threshold, Tehran’s exchange shops witnessed a rush of buyers seeking to purchase dollars and euros.

Domestic media on Sunday, April 9, citing exchange shops and currency dealers in Tehran, reported that each US dollar, which was sold for around 5,100 tomans on Saturday, exceeded 5,600 tomans by Sunday afternoon and according to some reports reached over 5,700 tomans.

The euro selling rate also surpassed 6,600 tomans.

Meanwhile, images and news published on social media depict the formation of long queues of currency buyers outside exchange shops in Tehran.

Witnesses told the ISNA news agency that on Sunday, some exchange shops refrained from selling due to high demand and dollar shortage. Some exchange shops also only sold dollars to travelers with passports while facing long queues.

The several hundred toman increase in the dollar rate in one day occurs while in recent months the exchange rate has been on an upward trend in Iran’s market.

The rising trend of exchange rates began in late summer, when each US dollar was selling for 3,500 tomans in Iran’s market, and increased in several phases until it surpassed the 5,600 toman threshold.

The value of Iran’s national currency has declined 50 percent against the dollar over the past seven months.

The recent decline in the dollar’s value has disrupted Iran’s market and worried citizens about the future of their family economies. Since many goods used by Iranian citizens are imported or manufactured from imported raw materials, the increase in exchange rates quickly causes prices to rise.

Reasons for the increase in exchange rates

Two months ago, following a sudden surge in the dollar’s value, the government tried to stop the rising trend of the exchange rate through measures such as arresting currency dealers and injecting currency into some exchange shops at cheap rates, but this trend resumed in April.

In recent months, some experts cited concerns about the return of sanctions if the US withdraws from the JCPOA, December unrest, increased liquidity, and Iran’s government difficulties in bringing oil sales revenue into the country as reasons for the increase in exchange rates.

This is while Siamak Shojaei, an economist and professor at William Paterson University in New Jersey, USA, considers other causes as well.

Mr. Shojaei, who recently spoke with Voice of America following the exchange rate exceeding 5,100 tomans, attributed another issue to people’s distrust in the country’s economic and political situation, saying that major domestic capitalists are moving their capital out of the country by any means possible.

He pointed to the registration of more than 50,000 Iranian financial and economic institutions in the UAE, as well as the failure to realize the 41 billion dollars in oil revenue that the oil minister had promised.

This economist, referring to 35 billion dollars in imports, said that all these figures should be placed alongside another factor in the increase of exchange rates, namely the latest mistake by Iran’s central bank. He explained: “After the widespread arrest of unauthorized street currency dealers and brokers, the central bank injected a large amount of foreign currency into the market to keep the dollar below 4,500 tomans, whereas immediately after making this mistake, which is even mentioned in textbooks, the country’s foreign exchange reserves are lost and the exchange rate rises again.”

Source: Voice of America