New Dollar Checking Accounts

The Governor of Central Bank of Iran (CBI) Mahmoud Bahmani today encouraged the public to deposit their dollar holdings into the new foreign currency checking accounts that carries 4% interest. In the past few weeks, a significant number of people rushed to purchase dollars, fearing a devaluation of touman, local currency, and the rise in prices as the result of the removals of subsidies.

Defending touman in the past few weeks, the CBI has been injecting 1 billion dollars a week into the currency exchange markets in purchasing the local currency [ISNA, 8 November]. Continuing on that pace, the country would need to convert nearly all its oil revenue-generated hard currency into touman; hence the CBI’s latest attempt to bring back dollars held by the public into the country’s banking system.