Accessibility links

Breaking News

Iranian President Downplays Turmoil On Foreign Exchange Market

A woman counts US dollars banknotes in a currency exchange office in Tehran
A woman counts US dollars banknotes in a currency exchange office in Tehran
Iranian President Mahmoud Ahmedinejad says Iran's foreign currency reserves have recently reached a level unprecedented in the country's history, RFE/RL's Radio Farda reports.

Speaking on October 5, Ahmedinejad downplayed the impact of international sanctions and pronounced the economic situation "not unusual."

"Whoever wants to disrupt the market will pay for it," he added, alluding to the recent turmoil on the gold and foreign currency market.

Iran's rial currency has plummetted during the past week against the U.S. dollar, which reached a record high on the Tehran currency market. Intervention by Iran's Central Bank has failed to stabilize the rial.

Gold traders in Tehran and some provinces have gone on strike to protest a 3 percent Value Added Tax (VAT) imposed on gold products. The strike reportedly is continuing despite government warnings.

Tehran-based economist Fariborz Raeesdana told Radio Farda on October 5 that contrary to Ahmedinejad's assertions, Iran's foreign currency reserves have declined noticeably.

"Iran's foreign currency reserves used to be substantial when the oil price was $120-130 a barrel," Raeesdana said. "But it's been almost three years since the government last made public any information about the amount of hard currency reserves, meaning that it is not much."

Raeesdana said he thinks the decline in foreign currency revenue is related to international sanctions. He predicted Iran's Central Bank will not be able to control the foreign exchange market indefinitely.