Mohammad Baqer Nobakht

Valiollah Seif, the head of Iran's Central Bank, announced on Tuesday September 24 that the bank will not allow the Iranian currency to keep rising in value.

Seif claimed that a drop in the exchange rate for the dollar could have a negative impact, and the Central Bank will not permit it to drop below the current rates.

Following the optimism generated in recent weeks by the reconciliatory tone of the Iranian administration and Western leaders, the dollar was exchanged below 30,000 rials this week in Tehran, while in the past year it had stayed well above this rate.

Today, September 25, the dollar was once again trading above 30,000 rials. Many claim that the statement by the Central Bank head has stoked fears about the future of the market.

The spokesman for cabinet said today, however, that the statement by the Central Bank chief does not mean that the government is pursuing a policy of increasing the price of the dollar.

Nobakht told reporters that the statement by Valiollah Seif refers to a policy of bringing back economic stability, which is a precondition for controlling inflation. He added that the government aims to increase production and investment in order to establish a realistic rate of currency exchange.