Currency crisis impoverishes Iranians, strains economic defenses

DUBAI: Desperate to afford her daughter's overseas university fees, 58-year-old retired Iranian teacher Maryam Hosseini withdrew all her savings from the bank to buy U.S. dollars.

The dollar was being offered for 215,000 rials on Monday, according to website Bonbast.com, against an official rate of 42,000.The currency plunge in recent weeks had forced the central bank to act, pumping hundreds of millions of dollars into the market to stabilise the rial. Central Bank Governor Abdolnasser Hemmatti described the interventions as"wise and targeted".

Its recent fall is partly sentiment driven, coming after the U.N. nuclear watchdog urged Tehran to stop denying it access to two suspected former nuclear sites, and partly a result of a broader economic deterioration due to coronavirus."A more fundamental factor is the shift of the current account from a traditional surplus to a small deficit in 2020 due to the collapse in oil export revenues," said Niels de Hoog, economist at Atradius, a trade credit insurance firm.

The government has asked Iranians not to flee the rial to buy foreign currency, and most traders in central Tehran exchange offices have been refusing to sell dollars, said trader Soroush in Tehran, who declined to give his full name.

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