Tehran Journal: Money Traders Fret Over Possible U.S.-Iran Pact

“Welcome to Tehran’s open-air casino,” said Behzad, a cheerful 34-year-old in the crowd around the statue. “Here everybody can become very rich or lose everything. In fact, most people here lose everything.”

For most of the past decade, particularly since Western financial sanctions began to bite hard two years ago, the dollar has been king around Tehran’s currency bazaar. With government oil revenues plunging and inflation surging, the Iranian national currency, the rial, plunged — to 40,000 to the dollar at its lowest point, from 10,000 to the dollar. For most people, the question was never whether to exchange rials for dollars but how soon.

But these days, the tenor of the bazaar has changed. With the prospect of an interim deal on Iran’s nuclear program — and the loosening of the sanctions, which might help revive Iran’s moribund economy — the fortunes of the long-suffering Iranian currency are looking up. Some people have even begun to think it may even make sense now to dump dollars.

Walking along Jomhuri-e-Eslami Street, 55-year-old Nayyeh, an Iranian woman who, like others interviewed for this article, refused to give her last name, was quietly pondering these issues.

“Will the nuclear case be solved?” she mused, almost talking to herself. “If there is a deal you would expect the rial to strengthen. But on the other hand this is Iran: logic things never happen here. I think I’ll wait with changing.”

One thing all the traders could agree on was that things were slow in the market these days, with none of the drastic swings that provide profit opportunities for the savviest traders. “If you need someone to work for you, I am your man,” a trader said jokingly, quoting a price that worked out to $13 a day.

Many traders speak wistfully of the heady times during the presidency of Mahmoud Ahmadinejad. Back then, with the president denying the Holocaust and talking about wiping out Israel, the rial suffered heavy losses. As sanctions fell into place, it sank even further. “Those were fantastic days,” recalled one trader, who said he would flip dollars within 10 minutes, making profits from armies of worried middle-class Iranians trying to protect their savings.

Not everybody was so pessimistic. The money-trading business had made Behzad rich, he said. Wearing an Italian designer coat and polished leather boots, he stuck out from most of the other money traders, most of whom had arrived on the cheap Chinese motorcycles parked all around the square.

“You think I’m bluffing? Look at this,” he said, holding up his iPhone 5 to show a photo of himself dressed only in shorts, sitting on a glass table filled with towering stacks of dollars.

“For me the sanctions have really worked,” Behzad said. “I only change from a million and more. What you are seeing here is just the tip of the iceberg.”

All around the square, hundreds of money changers lined the sidewalks. Some worked for official exchange bureaus, others operated from cars and alleyways.

For decades the government has been the biggest player, going to the black market to sell oil dollars for rials, to pay salaries and other domestic costs. “There are days they close down the entire area with riot police,” said one trader, who had been in the exchange business since 1986. In October 2012, when the rial was in its steepest plunge, the money changers were rounded up, some of them jailed and their money impounded. At the time the government said the traders had been manipulating the market.

But some of the traders said it was in fact the Ahmadinejad administration that had engaged in market manipulations, trying to drive the dollar higher. “When they bring the security forces out it means they want the dollar to go up so they can get more rials for their dollars,” one trader said.

A man was selling old bank notes from the time of the deposed shah, Mohammed Reza Pahlavi, drawing few customers. “At the time an entire family could live for a week with just one of those notes,” said a man named Rostam, pointing at a 1,000 rial note, which would be worth roughly 3 cents today, if it were legal tender. It is not, but they are sold as collectors’ items for $10 apiece.

“Those talks in Geneva will not lead to anything,” he said, pointing angrily at the abandoned British Embassy building across the street. It was deserted after the British left Iran in 2011, following a protest by vigilantes who climbed the walls and destroyed several offices.

“All our problems are because of them,” Rostam said, a common and not unreasonable complaint here, given the long history of British meddling. “I am sure they are still there, hiding underground and plotting against us.”

Behzad, the young money trader, said he did not believe in conspiracies; actually, he did not believe in anything other than the power of the almighty dollar. “Nothing will ever be solved, the leaders of the Islamic Republic will be talking to U.S. presidents decades from now, and money will always need to be changed,” he said.

He explained how he and others used to buy their dollars in Iran from average citizens and carry them in suitcases to Dubai and Turkey, to buy gold. “Because of differences in the rates, each run makes me around $20,000,” he said. “I love the sanctions. I hope they are never lifted.”