August 6, 2018 - 12:07 PM EDT
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Iran moves to strengthen its currency to resist U.S. sanctions

Aug. 6 (UPI) --

The Iranian government has announced monetary changes intended to reinforce the strength of its currency, the rial, in the face of new U.S. sanctions.

The Governor of the Central Bank of Iran Abdolnasser Hemmati unveiled the package late Sunday, saying the new policy will strengthen currency despite the new fiscal penalty.

Under the U.S. sanctions that take effect Tuesday, Iran is barred from purchasing or acquiring U.S. dollars.

The policy changes include a secondary currency market, launched last month after the Iranian rial sunk to a record low against the U.S. dollar. The rial has lost half its value so far this year.

With the secondary market, Iran's Central Bank would not be involved in determining dollar exchange rates, which critics argued only resulted in producing unrealistic rates.

Instead of the bank determining exchange rates for main exports like natural gas, steel and other metals, they would be tied to a 'floating market' of supply and demand, Hemmati told IRNA.

The Central Bank will not interfere in the rates, but it will use its powerful currency to manage the market if necessary. That is, the 'floating market' will be controlled, he sad.

Source: United Press International (August 6, 2018 - 12:07 PM EDT)

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