Iran to ease currency rules to buoy Rial ahead of sanctions - Reuters

The Iranian state TV reported on Sunday, Iran seeks to ease the foreign exchange rules in an effort to stall the meltdown in the Rial currency amid looming US sanctions on Iran.

Key Highlights (via Reuters):

A state body led by President Hassan Rouhani and including the heads of the judiciary and parliament on Sunday partially lifted a ban on the sale of foreign currency at floating rates, allowing exchange bureaux to sell at unofficial market rates for purposes such as overseas travel.

That reverses the decision in April to ban trading currency outside the rate of about 42,000 Rials to the dollar

Central bank governor Abdolnaser Hemmati said the plan reflected Iran’s self-confidence in the face of the looming U.S. sanctions.

“This shows our power. The same day you (Americans) impose sanctions we open our economy. We have no problems, so why should our people worry?,” Hemmati said in a live televised interview.

Hemmati said the central bank would allow a “managed float” of the rial’s exchange rate and try to avoid using up its reserves to support the currency.

“The central bank will try not to interfere in setting the price of hard currencies, which will be determined by supply and demand, however, the bank’s supervision will prevent unbridled (market swings) and the creation of a black market,” Hemmati said.

To encourage Iranians to return their hard cash to the economy, the plan allows the central bank to set up dollar savings accounts for ordinary people, state television said.