Hassan Rouhani, Iran’s president, warned exporters that they risk prosecution if they keep their foreign currency earnings offshore as Tehran struggles to stabilise the plummeting rial. The Iranian currency has fallen about 13 per cent against the dollar during the past month, fuelling already high inflation as the Islamic republic’s economy is battered by crippling US sanctions and the impact of the coronavirus pandemic.
It is the biggest fall in the rial for more than a year. The currency had stabilised after losing more than half its value after US president Donald Trump in 2018 withdrew the US from the nuclear deal Tehran signed with world powers and imposed new sanctions on the country. Washington’s punitive measures have severed Iran’s links to the global financial system, stymied its ability to export oil and caused a foreign currency shortage. But the authorities have blamed the latest fall in the rial on Iranian exporters in sectors such as petrochemicals, whom they accuse of keeping their foreign currency earnings in overseas accounts.
“If anyone exploits [the situation], the central bank will disclose their names and the judiciary will deal with them,” Mr Rouhani said after a cabinet meeting on Wednesday. “We will not allow them to misuse the situation at a time people are suffering.” The crisis has been exacerbated by the coronavirus pandemic, which caused Iran’s neighbours to close their borders with the republic, hindering its ability to export goods through regional networks.
Analysts and businessmen said exporters are reluctant to repatriate their foreign currency earnings because the government forces them to convert it into rials. Businesses must do this at a set government rate that prices the local currency far below the black-market value. The rial is trading at about 42,000 to the dollar officially, but at nearly 200,000 in the informal market.
Abdolnaser Hemmati, Iran’s central bank governor, said this week that out of $72bn worth of revenues generated from the non-oil exports over the past two years, $27bn had not returned to the country.