Bracing for US sanctions, Iran lifts ban on exchange offices

Central Bank relaxes currency laws in effort to buoy the rial hours before Trump administration to re-impose economic embargo

An Iranian street money exchanger holds US banknote in downtown Tehran, Iran, July 30, 2018 (AP Photo/Vahid Salemi)
An Iranian street money exchanger holds US banknote in downtown Tehran, Iran, July 30, 2018 (AP Photo/Vahid Salemi)

TEHRAN, Iran (AP) — With the Trump administration set to re-impose some sanctions on Iran on Monday, the country’s Central Bank lifted a ban on exchange offices, allowing them to resume work in a move aimed at bringing in badly needed hard currencies.

The bank also gave the green light for Iranian “legal institutions and businesses” to bring gold and foreign currency into Iran, according to the governor, Abdolnasser Hemmati.

A first set of US sanctions that had been eased by the Obama administration under the terms of the landmark 2015 Iran nuclear deal will take effect again on Monday, following President Donald Trump’s decision in May to withdraw from the accord.

Those sanctions target Iran’s automotive sector as well as gold and other key metals. Renewed sanctions targeting Iran’s oil industry and banking sector will resume on Nov. 4.

Hemmati told sate TV late on Sunday that “money exchangers are allowed to sell and buy foreign currencies” once again, to help Iranians get better access to “services and travel abroad.”

The official exchange rate of the national currency, the rial, will remain at 42,000 rials to the dollar for vital imports such as medicine and food, he added.

The decision goes into effect on Tuesday. Hemmati said the Central Bank will try “not to intervene in deciding on the price” of foreign currencies.

US President Donald Trump signs a document reinstating sanctions against Iran after announcing the US withdrawal from the Iran Nuclear deal, in the Diplomatic Reception Room at the White House in Washington, DC, on May 8, 2018. (AFP/Saul Loeb)

Foreign currencies had recently doubled in price on the black market.

The ban on the exchange offices, introduced in March, had left the offices idle overnight: gone were the familiar, daily long lines of Iranians waiting to buy or sell dollars. The measure also backfired, and the black market flourished.

Hemmati said the government’s decision in April to enforce a single exchange rate to the dollar had caused “serious problems” for the country.

He maintained the Central Bank’s decision reflects Iran’s “strength” in the face of renewed US sanctions.

“We are facing an economic war and the US government is restoring sanctions and also trying to increase them,” he said. “But our government is powerful … and is capable of opening up the foreign currency market on the same day.”

Hemmati said Iran has exported some $15 billion worth of non-oil products from April to July.

The United States has also been pushing its allies to halt their import of Iranian oil ahead of the November deadline. Among the top importers of Iranian oil are China, India, Turkey and South Korea.

Iranian President Hassan Rouhani, meanwhile, has suggested Iran might block the Strait of Hormuz in response to a shutdown of its oil exports. The strait at the mouth of the Persian Gulf is crucial to global energy supplies as about a third of all oil traded at sea passes through it.

read more:
Never miss breaking news on Israel
Get notifications to stay updated
You're subscribed