As Iran’s Rial Collapses, Currency Traders Are Arrested

A video by State broadcaster, IRINN, showed a video of dozens of currency changers being rounded up by police. They were plying their trade near the British embassy in Tehran.

During July, Iran’s the exchange rate for 38,400 rials to the dollar. The currency since then has dropped to a record low of 48,400 on Wednesday.

General Hossein Rahimi, Tehran’s chief of police, told local media that 10 exchange offices have been shut.

The living of many international sanctions that resulted from Iran’s nuclear deal with world powers, raised hopes that the currency would regain its lost value. In fact, on the day the deal was announced, people waved dollar bills alongside 10,000 rial notes, showing their hope that it would return to the level it had last enjoyed prior to the tightening of US-led sanctions in 2012.

After the arrival in office of US President Trump, the currency has continued to plummet, instead. His threats to tear up the nuclear deal have scared off many foreign investors and prevented international banks from re-engaging with Iran.

Still, many, like a currency trader, who asked not to be named. “It’s the government which is partly responsible for the rise in the dollar,” he said, and also claimed that the government was selling dollars at 48,800 rials on Tuesday — part of its struggle to repatriate dollars it earns from selling oil and gas abroad.

Also affecting Iran’s currency was the decision by the central bank to lower interest rates in September. Iran’s banks have offered nearly 20 percent in recent years. Iran’s central bank recently decreed they will no longer offer rates above 15 percent.

The recent uprising at the turn of the year in Iran seem to indicate that the people believe that the root of economic problems in Iran is corruption in government, as well as interventionist policies. They decried government spending of billions of dollars on the wars in Syria, Iraq, Yemen. They also criticized the funding of the regime’s proxies around Middle East and the world. Arresting minor money traders will not change anything. The Iranian people showed what they want during the protests, and what they called for is Regime Change.