Iran preparing currency rescue plans as US sanctions return

The rial has been in free-fall since President Trump pulled out of the nuclear deal

A close up shot shows Iranians trading money at a currency exchange office in a shopping centre in the capital Tehran on April 10, 2018./ AFP PHOTO / ATTA KENARE

Iran plans to implement a new financial rescue package on Monday to try to halt the decline of the rial.

The move coincides with the re-imposition of severe US sanctions on the oil-rich state’s economy after President Donald Trump pulled out of the nuclear deal with the country.

The decision follows a week of sporadic protests against Iran's political and religious establishment as concerns over the economy mount. On Friday, about 500 protesters in Eshtehard, a town west of the capital Tehran, used stones and bricks to smash the windows of a seminary and tried to set fire to its building, the semi-official Fars news reported, citing local cleric Hojjatoleslam Hendiani.

A number of the protesters had been arrested by police who then went house-to-house trying to identify them, Fars reported.

Video posted to social media this week purported to show protests in several Iranian cities, including the capital Tehran. None of the footage could be independently verified but appeared to show people chanting against the government.

Iran is struggling to quell anger over rising prices while seeking to assure the public that it can successfully counter the economic crisis triggered by Mr Trump’s decision to withdraw from the 2015 nuclear accord. At the same time, it is fighting to stem the steep drop in the rial, which has slumped to record lows against the US dollar since the start of the year amid protests.

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On Saturday, Iran’s judiciary, legislature and government approved plans by the Central Bank of Iran to strictly limit access to official, fixed currency rates to essential imports, the semi-official Iranian Students’ News Agency reported. Also approved were measures to tighten the process of allocating foreign currency to businesses and crack down on corrupt practices and currency manipulation, it said.

Mr Trump’s sanctions will ban purchases of dollar banknotes by Iran, prevent the government from trading gold and other precious metals and block the nation from selling or acquiring various industrial metals. The measures also target the country’s car sector and will ban exports of Persian carpets and pistachios to the US.

A second round of sanctions targeting Iran’s oil imports and energy and petrochemicals industries are scheduled to come into effect on November 4.

Details of the new measures will be discussed at a cabinet meeting on Sunday and then put into action after the head of the central bank announces them on Monday, first Vice President Eshaq Jahangiri told reporters, according to ISNA.