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Hoping to curb a spike in black market dollar trading, Iran has devalued its currency by 8%, Reuters reports.Black market trading rose after new U.S. sanctions was followed by a plunge in the riyal.
The new official rate, 12,260 rials to the dollar, will go into effect Saturday, Iran’s Central Bank governor Mahmoud Bahmani said. This is down from the current official rate of 11,296.
However, the new rate remains below the 18,000 to 20,000 rial price on offer at touts and other underground exchanges this year.
Bahmani said the new dollar rate would be freely available – although on Wednesday he indicated only people who could prove an immediate need for foreign currency, such as travellers or companies importing foreign goods, would be allowed to buy.
On Monday, the EU approved new sanctions on Iran, banning all new oil contracts and freezing Iranian central bank assets in the currency union.
Last week, Iran’s central bank formally banned currency trading outside of banks or official currency offices.