EghtesadOnline: The currency market was hit with a new bout of volatility on Wednesday with the US dollar crossing another threshold on the open market. According to the Tehran Gold and Jewelry Union website, the dollar was trading at around 183,470 rials late afternoon, from around 168,000 rials the day before.
The rial was quoted at 214,320 to the euro and 240,380 to the UK pound on Wednesday.
As the volatility continued, the Central Bank of Iran issued a statement saying that the currency needs of the people will be met in extra bank branches from next week.
It said the currency supply for importing basic needs and medicine is continuing "non-stop" through the secondary market's Nima system, Financial Tribune reported.
The rial has weakened to a series of record lows against foreign currencies in recent months. The official exchange rate, set by the central bank in April, is 42,000 to the dollar.
The Trump administration has vowed to reinstate sanctions on Iranian oil exports on Nov. 4. Washington reimposed the first batch of sanctions last month as part of the pressure campaign. The moves reverse the previous US administration's suspension of sanctions under terms of a 2015 nuclear deal between Iran and six world powers.
A weakening rial has made dollar-denominated imports more expensive for Iranians.
Official Currency Unchanged
Meanwhile the Majlis Economic Commission said Wednesday that the country’s official currency will remain the rial and changing it to the popularly known ‘toman’ by lopping off one zero has been rejected.
IBENA quoted the deputy head of Majlis Economic Commission Ali Akbar Karimi as saying that current conditions do not allow for that change to take place.
The decision to change the monetary unit was made while ratifying a CBI bill in a Cabinet meeting in Dec. 2016 chaired by President Hassan Rouhani. While the rial is being used as legal tender in official documents and budget statements, the toman is used more commonly in daily transactions of the people. Price tags on goods are mostly marked in rials. Ten rials is one toman.
Masoumeh Aqapour Alishahi, a member of board of directors of the commission, told IBENA about the agreement between the Central of Bank of Iran and the Majlis on money printing policies. According to the agreement, irresponsible money-printing is to be stopped by all means due to the worsening economic problems.
“There has been no new order for printing more money and money-printing will be done in proportion with the money which is phased out,” she added.
Speaking of the declining pattern in the use of paper money in recent years by the people and businesses, Aqapour Alishahi said one of the most important targets of the banking network is to increase the share of electronic payments to promote transparency, speed, and feasibility.
Accordingly, as a latest CBI report, the share of bank card use compared to cash stands at 59.1%. The development of electronic payment systems has led to more use of non-cash payments.