Iran's top forex official arrested ahead of US sanctions

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The top foreign exchange official at Iran’s central bank was arrested on Sunday, following the announcement of a series of reforms to forex rules ahead of US sanctions.

Iranian state media IRIB reported on Sunday that Ahmad Araghchi, who was responsible for forex in his role as vice-governor at the Central Bank of Iran, was arrested alongside “several other unnamed individuals.”

IRIB cited judiciary spokesman Gholam-Hossein Mohseni Ejeie as saying that among the other arrests were a government clerk and four currency brokers.

The arrests came after the central bank announced a series of measures to stem a rapid decline in Iran’s currency and counter the effect of US sanctions, which are set to come into force from Monday.

Restrictions on forex rules will see taxes on and barriers to incoming foreign currency lifted, while foreign currency exchanges that have been closed for months will reopen, state media reported on Sunday. Exchange bureaus will now be able to sell foreign currencies at unofficial floating market rates.

The central bank also announced a subsidized allocation of foreign currency for the purchase of pharmaceuticals and basic commodities.

Speaking on state television, Iranian central bank Governor Abdolnaser Hemmati said “we are in conditions similar to an economic war,” adding that Iran’s response to US sanctions would be “opening up our markets.”

Hemmati, who was appointed less than two weeks ago, said that he wanted “to bring back public trust in the central bank,” before looking to reassure the public that “we have no problems, so why should our people worry?”

Domestic confidence has been hit by the rapid decline in the rial, Iran’s currency. Since the beginning of the year, the rial has almost halved in value since April and is down by nearly two thirds since the start of the year.

The Iranian central bank’s most recent report on consumer spending showed inflation hitting 10.2 percent last month, up from 9.4 percent the previous month.

US Secretary of State Mike Pompeo told reporters on Sunday that the US will fully enforce sanctions against Iran and will make an announcement detailing their reinstatement on Monday.

Writing for CGTN, Charhar Institute research fellow Wang Jin said that the sanctions will “significantly influence Iran’s social economy.”