Iranian police have arrested 90 currency traders, officials reportedly announced this week, after the nation’s currency fell to a record low of 50,000 to the dollar.
Amid widespread public dissatisfaction with the government’s handling of the economy, some local observers are pointing the finger at speculators distorting the currency market.
Newcomers are looking to profit from the “growing gap between the official and the street rate,” Ali Mirzakhani, editor-in-chief of the Donya-e-Eghtesad economic newspaper, was reported by Bloomberg as writing. Demand fueled by “speculators” must be controlled, he said.
“There are some profiteers in the market who want to see the market rise, the dollar keep going up,” said Khosrow Abdi, a currency trader based in Tehran’s main street for foreign-exchange dealing.
Others blamed — or credited depending on who you ask — US President Donald Trump for the rial’s slide. “All things started with Donald Trump taking over the US presidency, and with every word from the new US president, the Iranian currency would be shaken. But the real decline occurred after the first public threat from Trump in September, last year in which he said the nuclear deal with Tehran could be cancelled,” Middle East Monitor quoted the BBC as reporting.
The weakening rial also comes amid a broad-based collapse in confidence among the Iranian public regarding the leaders ability to manage the economy, a catalyst for the recent street protests that spread across the country.
“For Iranians expecting higher inflation and looking to protect their savings, the dollar is a ‘safe haven,’” Mazdak Rafaty, managing partner at United Arab Emirates-based Ludwar International Consulting, was quoted as saying. Depreciation shows a “mistrust in the local economic structures and leaders,” he said.
In addition to the public unrest, polls also suggest Iranian’s view of the economy is only getting worse.
The first major public opinion poll since the protests, reported by The Wall Street Journal early this month, found that 41% of Iranians rated the country’s economic situation as “very bad,” up from 34% from the same institution’s polling last June. An additional 28% said the economy was “somewhat bad,” while around 60% said it was getting worse.