The Central Bank of Iran (CBI) has ordered a new limit on withdrawal of cash from banks amid toughening of rules on money laundering and also concerns about hoarding money because of the new coronavirus pandemic.
On July 28, 2020, a CBI decree issued said banks should observe a daily limit of 150 million rials ($652) for all customers, meaning that companies and legal entities would also be covered by the new law.
The decree did not say whether businesses that have workers on their payroll would be exempt from the new cap.
The decree would be valid until late March 2021 and would nullify a previous cap imposed in early June which allowed cash withdrawals of up to 450 million rials (nearly $2,000).
The order has been issued by the CBI’s Department on Fighting Money Laundering and Terrorism Financing. It is in line with a series of extensive measures implemented in recent years to clamp down on illegal practices in the Iranian banking system.
On the other side, Iranian President Hassan Rouhani says his administration opted for massive visionary investment in the country’s infrastructure despite economic woes caused by American sanctions.
Speaking to a group of petrochemicals and steel industry leaders in Tehran on July 27, Rouhani said heavy investment in Iran’s energy sector would prove worthwhile in a few years’ time despite current criticism that his administration should have spent more to control a rampant foreign currency market.
He said his government, in office since August 2013, has already spent $14 billion to develop Iran’s petrochemical sector, adding that the industry would continue to expand through a further investment of $8 billion.
However, experts say the new cap could also serve government policies meant to contain inflation as it would prevent cash hoarding and panic buying related to the coronavirus pandemic.
Electronic transfers and e-payment systems are in wide use in Iran although banks charge small fees for certain services.
The government has implemented various measures to contain prices as the economy is under a double pressure both because of the pandemic and a series of unilateral sanctions imposed by the US.
The rial closed 235,000 against the US dollar in unofficial market trade, down more than five percent compared to the previous day.
Iran has seen a major decline in oil revenues mainly because of American sanctions while the national currency rial has lost much of its value since 2018 when the US launched its campaign of maximum pressure against Iran.
Critics believe Rouhani’s government should have injected more foreign currency into the forex market to control fluctuations in the price of the rial.
Lower exports of crude have been partly compensated by increasing shipments of petchem products from Iran, said Rouhani, adding that output for refined products had doubled since 2013, including the production of gasoline which he said had increased from 50 million liters per day to 110 million liters currently.
This article was edited using the data from the presstv.com.