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Iran central bank given sweeping powers to intervene in forex market

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
File photo shows a view of the Central Bank of Iran headquarters in the capital Tehran.

The Central Bank of Iran (CBI) has been allowed to openly intervene in the country’s foreign exchange market to dampen prices that have climbed to near record highs in recent days.  

Reports in local media published on Thursday said that heads of the three branches of the Iranian government, who form the top decision-making body in the country, had authorized sweeping powers for the CBI to intervene in the forex market.

The reports said the new mandate would enable the CBI to restore calm to a market where foreign currency prices have soared in recent days.

The Iranian rial traded at 316,500 against the US dollar on Thursday, slightly lower from prices reported at the close of trade a day earlier.

The price is a near-record low for the rial in recent years. The currency has lost much of its value since the United States pulled out of an international deal on Iran’s nuclear program in 2018 and imposed sanctions on the country.

However, the official IRNA news agency said that hard currency prices will drop after the CBI starts to implement its new forex policies.

The Tasnim news agency said CBI managers had held an emergency meeting with a group of currency exchange businesses late on Wednesday to brief them about the new policies.

CBI Governor Ali Salehabadi confirmed on Wednesday that the lender will be given a special mandate to intervene in the exchange market.

Iran has reported a surge in oil export revenues in recent months despite American sanctions targeting the sales.

Authorities say the country has no concerns about the supply of foreign exchange needed to fund imports of basic goods into the country.

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