Iran raises rates, closes accounts to shore up rial

Iran raises rates, closes accounts to shore up rial

Iranian police cracked down on unlicensed money changers in Tehran on Wednesday, arresting around 100 traders, Tehran's police chief told local media, in a sign that authorities are concerned about speculators pushing the rial to record lows.

The operation is aimed at tackling a slide in the value of the rial, which is down more than 10% this year, caused by a dollar shortage that has spooked businesses reliant on hard currencies, Financial Times reported. The police crackdown prompted a small rebound in the currency to 48,220 in trading on Feb 14.

The rial has been hurt by concern about Iran's agreement with world powers to curb its nuclear program in return for the lifting of most worldwide sanctions.

Analysts say the rial's accelerating decline in recent months has added to popular discontent in Iran, where authorities recently put down a wave of popular protests against economic hardship and corruption.

Iran's economic ties with foreign countries could be damaged further if the United States pulls out of the nuclear accord, as U.S. President Donald Trump has threatened to do.

"The detainees, driven by greed, were attempting to disrupt the market and economic order", Rahimi told the Fars New Agency. As the currency has continued to lose value, speculators have sped the process along by betting against the rial's value.

Spare a thought today for your foreign exchange brothers in Iran.

This coincided with a wave of arrests targeting the currency market in central Tehran, in "coordination" between the Iranian police and the Central Bank.

But the currency has continued to weaken, analysts say, particularly in the past year as the Trump administration adopted increasingly aggressive policies toward Tehran's rulers. Bank accounts of 775 currency dealers have been closed, Iranian media reported.

Iran's central bank will raise deposit rates to bolster the value of the Iranian rial after it dropped to record lows, the head of the central bank said, according to a report by state television on Thursday.

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