[REVISION HISTORY]
Iran exchange rate volatility and central bank response
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2026-10-02 16:35 UTC → 2026-10-04 09:02 UTC ·
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Officials from the Central Bank of Iran have identified deep-seated structural issues contributing to rising exchange rates and currency volatility. Mehdi Darabi, an assistant to the Chief of the Central Bank, previously attributed the instability to decades of accumulated imbalances, chronic government budget deficits, and a shift from being a net exporter of fuel to a net importer. He also noted importer, noting that the current wartime environment has damaged domestic industries and impacted oil sales. industries. In response recent updates, Darabi, acting as assistant to market fluctuations, the Central Bank has head of foreign exchange, stated 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. The bank maintains that current rates do not fully align with fundamental economic variables, citing psychological pressures and uncertainty as primary drivers. To manage liquidity, the Central Bank has utilized open market operations and regulated credit. Notably, the interbank interest rate has remained at its 24 percent ceiling for six consecutive weeks, suggesting high demand for short-term liquidity within the banking network. The bank clarified that continues to emphasize its goal is to maintain of maintaining stability rather than defend a specific numerical rate. Under new legal frameworks, the bank has through authorized itself to intervene interventions in the market through the buying and selling of gold and foreign currency markets to return align the market to a path consistent with economic realities.
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- 2026-10-04 09:02 UTC Iran exchange rate volatility and central bank response
- 2026-10-02 16:35 UTC Iran exchange rate volatility and central bank response
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