A Tehran restaurant owner recently told me the advice he’d been giving his friends for the last year: ‘Sell your car. Buy dollars.’ Sound counsel, I thought. Exchanging Iranian rials for dollars at the end of 2011 and converting them back nine months later would have yielded enough profit to buy two new cars. Waiting another month would have got you a cheap motorbike too. This sort of ‘street maths’ filters into every conversation. In September a waiter told me he had just sold his stash of $10,000 for a hefty profit. A young woman took her pay cheque to the bank every month and bought dollars with it. In this unofficial currency market the value of the rial dropped nearly 70 per cent in ten months. The frenzied speculation began early last year, after the EU announced it was going to restrict imports of Iranian oil. Government attempts to stem the flight only pushed the rial’s value down further. ‘The Central Bank governor promises on Tuesday to take action, and the dollar goes up on Wednesday,’ a businessman joked. ‘So he reverses his position on Saturday, and the dollar goes up on Sunday.’

LRB 24 January 2013 | PDF Download