TEHRAN: Iran’s central bank said on Wednesday it would take further steps to support the rial currency including raising domestic interest rates after it upped injections of hard currency into the market earlier this week. Governor Mahmoud Bahmani said Iran would increase bank account interest rates, issue more bonds and abolish a recently introduced sales tax on gold to make other investments more appealing to Iranians who have rushed to buy dollars in recent weeks, depressing the value of the rial. “We have used (only) one of our tools to control the market,” Bahmani told state TV news. “We are going to use all of our tools to create a balanced market.”
Bahmani announced earlier this week that Iran would inject between $1.5 billion and $3 billion into the market every week to stop the rial sliding further after the central bank devalued the currency by more than 10 percent a week earlier.
The price of dollars in Iran has increased sharply over recent weeks due to several factors: rising inflation, a reduction in bank interest for savers and a new value-added tax on gold coins, all of which pushed Iranians to seek hard currency as a safe haven for their wealth.
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