Iran woos local investors as U.S. sanctions loom, currency falls

Pulling Out

The sanctions start to come into effect in August but some European companies investing in Iran and with big U.S. operations have already announced they will pull out of business deals with Tehran.

The Iranian rial plunged to a record low against the U.S. dollar on the unofficial market on Saturday. The dollar was offered for as much as 97,500 rials, compared to about 85,500 a week ago, according to foreign exchange website Bonbast.com.

The currency has lost more than half of its value this year because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who fear the effects of sanctions.

Judiciary spokesman Gholamhossein Mohseni Ejei said on Saturday that 18 people had been arrested over alleged profiteering from foreign exchange dealings and the illegal importing of luxury cars, state television reported.

In late December, demonstrations which began over economic hardship spread to more than 80 Iranian cities and towns. At least 25 people died in the unrest, the biggest expression of public discontent in almost a decade.

Demonstrators initially vented their anger over high prices and alleged corruption, but the protests took on a rare political dimension, with a growing number of people calling on Supreme Leader Ayatollah Ali Khamenei to step down.