Stop Fundamentalism – Heavy presence of Iranian police and security agencies in the streets of Tehran to confront illegal and uncontrolled sales of foreign currency, did not help stabilize the value of Rial today. Dollar was sold in streets of Tehran for 17000 to 17300 Rials today which is relatively higher that its price last week.
The Iranian Central Bank has stopped providing foreign currency to foreign exchanges altogether.
This is while reports from Iranian media indicate that the falling price of Iranian money has started having its effect of consumer prices and prices have started to climb sharply.
The downfall of the Iranian Rial started two months ago but it took a sharp hit during the past two weeks as recent tensions between Iran and the West heated. Many believe the downfall of the Iranian money is the direct effect of the international sanctions on this country’s economy.
European countries will meet on 23 January to discuss sanctions on Iran’s oil sector.
On the other hand Iran has threatened to close the Strait of Hormuz in the Persian Gulf to oil cargo in case of an oil embargo against it. The countries in the Gulf region supply at least 40 percent of worlds oil supply which most of it passes through the Persian Gulf and Strait of Hormuz.
Saudi Arabia has vowed to compensate for any shortage in the market if for any reason the available oil supply fluctuates. That indirectly refers to the possibility of Europeans needing to buy oil from other alternative suppliers.