FOR the second time in as many months, Iran’s “dollar patrol” is on the streets. The country’s currency, the rial, has lost a third of its value on the black market since September. On April 9th it sank to a record low of 61,000 to the dollar (when the official rate was 37,850). The next day the government imposed a rate of 42,000 and vowed to arrest anyone who bought or sold rials for what they are actually worth—as it did during the previous currency crisis, which was only in February.
Some are nonetheless flouting the rules, demanding 56,000 rials or so for a dollar. There were long lines and, surprise, surprise, dollar shortages at the handful of exchanges using the official rate. A lack of confidence in the rial reflects a lack of confidence in the economy. The housing market is stagnant and the banking sector is shaky. Iranians are snapping up foreign currency because it is one of the few sound investments available.
Something similar happened in 2012. Back then Iran was under...Continue reading
Source: Middle East and Africa https://ift.tt/2K0uUoe
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