The governor of the Central Bank of Iran says national currency the rial has strengthened over 40 percent, in a blow to US attempts to bring down the country’s economy.
“Inflation has stabilized and the rial has recovered, while the economy has recorded growth over the last 12 months despite the impact of sanctions and the threat of war,” Abdolnasser Hemmati told IRNA.
Hemmati noted that “through the guidelines and support of the Leader of the Islamic Revolution and the president, the resistance of the nation as well as the prudence of the Central Bank”, Iran managed to restore stability to the market.
The CBI governor said Iran’s currency regained its value despite the most complicated and unprecedented sanctions and monetary restrictions launched by the US and its regional allies against Tehran.
“Iran’s enemies had sought a currency collapse and economic disintegration to make chaos in the country. The rial, however, has rebounded, inflation has been reined in, and the economic growth is imminent,” Hemmati said.
US president Donald Trump withdrew his country from the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA) in May 2018, and launched the campaign of “maximum pressure” against Tehran.
The rial plunged from highs of 50,000 against the dollar in early months of 2018 to historic lows of 190,000 in September last year, just before Trump imposed a series of new sanctions on Iran.
The rial currently trades at year-long highs of above 110,000 to the US dollar, according to currency rate websites and reports from Tehran’s unofficial exchange market.
Iran’s tightened control on currency transfers and its reform plans for various sectors of the economy have already yielded results, while businesses and households are adapting to the situation that followed the sanctions.
Trump had claimed in May, when he toughened bans on Iran’s sale of oil, that Tehran would be forced to resume talks on its nuclear program to save its economy from a free fall.
On Friday, British daily the Financial Times said Iran’s stock market has notched up huge gains despite US sanctions, ranking among the world’s best performing over the past 12 months.
The fall of the rial against foreign currencies last year pushed Iranians into stocks to protect their savings from losing value.
Stocks have been up 73 percent in local currency terms over the past 12 months, outpacing any other global equity market.
“Iran’s bourse showed it can hedge against foreign currency risks and is the best market to guarantee people’s money with high dividends,” Bloomberg cited the manager of a Tehran-based asset management firm who asked not to be named as saying.
The Financial Times said the top 30 listed companies account for more than 60 percent of the stock exchange’s market cap, according to local analysts — including Iran’s top exporters of petrochemicals, steel and copper. These businesses generate foreign currency income, giving them protection from domestic economic stagnation.