DUBAI (Reuters) - Iran’s central bank has eliminated a subsidized, cheaper rate for foreign currency and reported a weaker official rate in its place, according to Iranian media and the central bank’s website on Saturday.
The Iranian rial has lost much of its value in the last two years, under pressure from international sanctions over Tehran’s disputed nuclear program that have limited the country’s oil sales, cut its access to the global banking system, and made it more difficult for it to earn foreign exchange.
On Saturday, the central bank on its website listed the price of a dollar at 24,779 rials. Iran’s Mehr and ISNA news agencies said that rate would replace the previous official “reference” rate of 12,260 rials to the dollar.
There was no statement from the central bank on Saturday explaining the change.
The new rate is still far stronger than the value of the rial in Iran’s unofficial market of small currency traders, where most Iranians can access hard currency.
The rial was trading for about 33,000 to the dollar in the open market on Saturday, currency-tracking websites said, less than half of its value in 2011.
Since January 2012, the Iranian government had maintained a subsidized rate of 12,260 rials to the dollar, meant to be used for importing the most vital goods such as food and medicine.
But critics of outgoing President Mahmoud Ahmadinejad in Parliament have accused his government of misusing the cheap dollars, including by allocating them for the illegal import of luxury cars.
And health officials have accused the government of failing to provide billions of cheap dollars earmarked for medicine imports, driving up their cost at home.
Iranian media said the newly announced rate means the government now recognizes only one official rate for the rial.
At times in the last year, the government had recognized multiple rates in a tiered system designed to provide dollars at prices depending on what class of imports they were being used to purchase, with basic goods prioritized over what were considered luxury items.
Editing by James Jukwey