Dollar Hits 18-Month Low Against Rial on Iran Free Market
The US dollar hit an 18-month low against the Iranian rial on Saturday, traders said, amid sharp criticism of the central bank's plans to push it lower still in the coming months.
The greenback was trading at 8,000 rials Saturday morning after last week's declaration by the central bank's director, Mohsen Nourbakhsh, that he wanted to get the dollar down to 7,900 on the free-trading market.
The dollar had been at 8,150 on Wednesday and traders said they thought the fall was largely due to the bank's release of dollars onto the market via the Tehran Stock Exchange.
They said some four billion dollars had been put on the market in recent months and that they were expecting another 3.3 billion to be sold before the end of the Iranian year in March.
Both traders and conservative rivals of the pro-reform government of Mohammad Khatami criticized the bank's intervention.
"This policy of selling foreign currency is inflationary and weakens the national currency," analyst Ahmad-Reza Jalali said, quoted in Saturday's Hayat-e No newspaper.
Meanwhile conservatives have charged the government is injecting dollars into the market to keep rates low for next year's presidential election in May, when Khatami is expected to stand for a second four-year term.
"Exchanges rates have doubled in three years (since Khatami's 1997 election) and the government now wants to lower them ahead of the next election," said conservative former MP Mohammad-Reza Bahonar.
The official exchange rate remains at 3,000 rials to the dollar, the rate set by the central bank in 1995 in a bid to stabilize the rial and prevent the flight of capital outside the country -- TEHRAN (AFP)
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