The rial has lost about half of its value since April because of a weak economy, financial difficulties at local banks as well as heavy demand for dollars among Iranians who fear the effects of sanctions.
Iran plans to implement a new financial rescue package to try and halt the rial’s decline, coinciding with the re-imposition of severe US sanctions on the oil-rich state’s economy after President Donald Trump pulled out of the Iran nuclear deal.
The decision follows a week of sporadic protests against Iran’s political and religious establishment as concerns over the economy mount.
Iran is struggling to quell anger over rising prices while seeking to assure the public that it can successfully counter the economic crisis triggered by Trump’s decision to withdraw from the 2015 nuclear accord. At the same time, its fighting to stem the rial’s decline, which has slumped to record lows against the US dollar since the start of the year amid protests.
Iran’s judiciary, legislature and government approved plans by the Central Bank of Iran to strictly limit access to official, fixed currency rates to essential imports, the semi-official Iranian Students’ News Agency reported. Also approved were measures to tighten the process of allocating foreign currency to businesses and crack down on corrupt practises and currency manipulation, it said.
The US sanctions will ban purchases of dollar banknotes by Iran, prevent the government from trading gold and other precious metals and block the nation from selling or acquiring various industrial metals. The measures also target the country’s autos sector and will ban exports of Persian carpets and pistachios to the US
A second round of sanctions targeting Iran’s oil imports and energy and petrochemicals industries are scheduled to come into effect on 4 Nov.
Details of the new measures will be discussed at a cabinet meeting on Sunday and then implemented after the head of the central bank announces them on Monday, first Vice President Eshaq Jahangiri told reporters, according to ISNA.