The Supreme Council of Economic Coordination on Tuesday extended the authority of the Central Bank of Iran for one more year to control the currency market and regulate exchange rates.
Abdolnasser Hemmati, the CBI governor, made the announcement in his social media account, adding that the mandate includes the authority to undertake much-awaited reforms in the struggling banking sector.
The council, which functions as the top economic decision-making body comprising the head of three branches of government, gave a nod to the CBI in summer 2018 to step in and intervene in the chaotic currency market following steep increase in forex rates.
In that year the currency crisis emerged after US president, Donald Trump, decided in May to pull out of the landmark 2015 nuclear deal Iran had signed with the six world powers.
Soon after Trump announced tough economic sanctions and said he would use a “maximum pressure” policy to bring Tehran back to the negotiating table for talks on the nuclear and other key foreign policy issues.
Forex rates started to decline in autumn 2018 thanks to the authority given to the CBI by the top state council to control the situation and strengthen the national currency.
One dollar had soared to 180,000 rials and the national currency lost almost 60% of its value in summer 2018, due to a variety of reasons not to mention the role of avaricious middlemen and speculators long involved in gouging currency prices.
Except for sporadic fluctuations, the regulator had managed to maintain stability in the currency market with the dollar worth 110,000-130,000 rials for more than a year.
However, currency rates have been rising over the past two months due to risks the economy is facing plus rising demand for foreign currency.
The dollar was sold for 153,000 rials in Tehran’s open market on Tuesday.
