10/02/2012, 00.00
IRAN
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Rial loses almost 17 per cent in a single day

The government tries to counter the problem by setting up a foreign exchange centre funded with oil revenues where dollars will be sold at a rate 2 per cent cheaper than the street rate. In a year, official foreign reserves dropped from US$ 106 billion to 50-70 billion, whilst inflation is running at 25 per cent a year.

Teheran (AsiaNews /Agencies) - Iran's currency lost 17 per cent of its value against the dollar yesterday. The black-market exchange rate plunged to about 34,500 per dollar on Monday, down from Sunday's rate of about 29,600. According to official sources, the rial was trading at 32,800 against the dollar on Monday compared to 29,700 the day before. Despite the discrepancy, what is clear is that the rial lost more than a quarter of its value against the dollar.

For the United States, this is a sign that Western sanctions against Iran are working. The latter were imposed to pressure Iran into suspending its nuclear programme. Tehran insists the latter is peaceful. But in its latest report, the International Atomic Energy Agency said that Iranian authorities were blocking access to one site suspected of conducting research connected to nuclear weapons.

In order to cope with the fall of its currency, Tehran has set up a foreign exchange centre, which officially opened on 24 September.

The Forex Transaction Centre is working with a robust backbone of foreign currencies, the Fars News Agency quoted Central Bank of Iran Governor Mahmoud Bahmani as saying.

"With the distribution of currency at this centre, the exchange rate in the market will go down because some of the demand (for dollars) will be met at this centre and the pressure of demand will be removed," Bahmani said.

The centre allows importers of goods to buy dollars at a rate 2 percent cheaper than the street rate at any given time.

The government plans to use revenues from petrochemical sales and 14.5 percent of its oil revenues to provide dollars for the centre, Bahmani explained.

Even if the Forex Centre could stabilise the rial at home, Iran would still be facing supply problems.

Although there are no official figures, Iran had US$ 106 billion of official foreign reserves at the end of last year; enough to cover about 13 months of imports of goods and services in normal times, this according to the International Monetary Fund. Now, estimates put that figure at US$ 50-70 billion.

At the same time, inflation is running at 25 per cent a year, a heavy burden Iranians already have to bear.

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