Iran allows cbank to defend rial by forex market intervention

DUBAI: Iran on Saturday authorised the central bank to intervene in the foreign exchange market in defence of the rial, state television reported, after the currency fell to repeated record lows in recent weeks following the reimposition of U.S. sanctions.

The rial has slumped due to a weak economy, difficulties at local banks and heavy demand for dollars among Iranians who fear Washington´s withdrawal from a landmark 2015 nuclear deal and renewed U.S. sanctions could shrink Iran´s oil exports and derail its economy.

A set of U.S. sanctions targeting Iran´s oil industry is due to take effect in November. President Hassan Rouhani has called the sanctions an "economic war" against Iran. A top government body, headed by Rouhani and the heads of parliament and the judiciary, "gave the central bank governor the necessary authority to intervene in the foreign exchange market and to manage it", state TV said.

"The central bank will intervene in the foreign exchange market through banks and authorised exchange shops and carry out the necessary measures to control the exchange rate of hard currencies," the television quoted the body as saying. The central bank will "announce the rate of exchange in the foreign exchange market at an appropriate time," the body added.