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Iran's Foreign Currency Market In Turmoil

An Iranian man counts rials.
The U.S. dollar hit a record high on the Tehran currency market on September 29, reaching about 12,500 rials/$1 on the black market, despite the dollar weakening internationally, RFE/RL's Radio Farda reports.

The official exchange rate set by Iran's Central Bank was 10,200 rials to the U.S. dollar.

A number of money changers in Tehran reportedly closed their businesses due to sharp fluctuations in the dollar/rial exchange rate.

Paris-based economist Fereidoun Khavand told Radio Farda that while the U.S. dollar has declined in value on world currency markets, in Iran it has strengthened. He said that this shows the Iranian economy is not operating in accordance with the world economy.

Khavand also said some analysts believe that the rise in the price of hard currency in Iran is related to changes in commercial relations between Iran and the United Arab Emirates, namely Dubai.

Khavand explained that Dubai plays a key role in Iran's economy. He said that following the imposition of international sanctions on Iran, Dubai has intensified its pressure on Iranian banks.

A money changer in London told Radio Farda that the exchange rate has increased because the channels for transferring foreign currency to and from Iran are blocked.

The UN Security Council imposed a fourth round of sanctions against Iran on June 9 over its controversial nuclear program.