Central Bank of Iran addresses currency volatility and interbank rates

The Central Bank of Iran has issued a statement addressing recent volatility in the foreign exchange market. The bank maintains that current exchange rates do not fully align with fundamental economic variables, attributing much of the recent surge to psychological pressures, market expectations, and increased uncertainty rather than structural shortages.

Mehdi Darabi, assistant to the head of foreign exchange at the Central Bank, noted that when adjusted for inflation, current real exchange rates are comparable to levels seen in 2018 and 2020. He identified four primary drivers for the currency outperforming inflation: precautionary demand, speculation, delays in goods importation, and delays in the return of export earnings.

Simultaneously, the interbank interest rate has remained at the 24 percent ceiling for six consecutive weeks. This stability at the top of the corridor suggests high demand for short-term liquidity within the banking network. The Central Bank continues to utilize tools such as open market operations and regulated credit to manage liquidity pressures and maintain monetary stability.