Iran Witness: The Small Exchanges of Currency and Politics (Persian Umpire)

UPDATE 1400 GMT: An EA correspondent comments:

My personal experience contradicts this account completely. I sent several hundred pounds last week to my business partner in Tehran, via my usual route - a money exchange operator working out of an officially registered office in central London. I paid cash on Friday, money was in the business partner's account in Tehran the next morning. The profit made by the exchange was agreeable --- the rate quoted was only 22 tomans lower than the Central Bank one per pound.

In short, there might be restrictions and problems in money transactions, but it is not yet as categorical as what Umpire is saying.

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Persian Umpire writes from Tehran:

I paid a visit to a pawnshop this week. That’s one effect sanctions have on the lives of ordinary people. Fortunately, my trip wasn’t for pawning anything, although such a day may just be around the corner, but it was the end of a long quest to find a way to get paid by a foreign client.

Ever since the sanctions materialized, money transfers have become very knotty. In the old days, we would provide our bank’s foreign rep and routing information (another bank in Europe for example), and our account number, and then waited for notification of the transfer, but those days are gone.  Even currency exchange shops are no longer providing this service. They used to receive money in their accounts on foreign soil and pay us Rials out of their accounts in Iran, making a profit in the exchange. These days, their accounts are under scrutiny, frozen, or they’re just afraid to make such moves.

So my partner looked for an alternative, and found a Jewish man with a pawnshop.

“Hello.”

“Hello.”

A sweet, old, bespectacled man, wearing a mustache, was standing behind the counter. Next to him were two young men, most likely his sons.

“We called about the money transfer and you said we should come to the store for the account information.”

“Ah, yes, yes…come in.”

Most of the items in the shop looked like antiques: old clocks, a small desk, candleholders, and whatnot. Under the glass counter, there were some old coins and Faravahar pins.

The old man picked up the phone and made a call.

“Hello?…hey I called you about the transfer in Europe earlier today, so which account is good?”

The good one was an account in Eastern Europe.

After hanging up, he produced a little notebook and set it on the counter. I noticed the name of a certain Ayatollah G. and some numbers written on the open page. Seems like we would be listed next to him.

“So how’s the economy doing?”

“Well, the Ayatollahs are sending money out like crazy,” he said, pointing to his notebook. “What can I say?”

“Shouldn’t be too bad for you these days.”

“Not bad at all, with the banking situation and the wild foreign currency market.”

A couple of his customers came in asking for American dollars. Exchange offices no longer sell currency to ordinary people, unless they have a passport and ticket to show. Even in those cases, they sell up to two thousand dollars only. A cab driver told me that traveling people who don’t need to buy currency are “renting” their passports and tickets for fifteen or twenty thousand Tomans. I’ve also heard that airport authorities don’t let people take more than three thousand dollars with them while traveling. The limit used to be ten thousand.

The owner told them he was out of dollars at the time and asked them to check with him in a couple of days. He then gave us a paper with his accounts and other information listed on it and highlighted the account in question.

“Once the money is in, I’ll buy your Euros one Toman higher than whatever the Central Bank says on that day.”

We asked him about being a minority in Iran these days, and he smiled and said: “We’ve learned to live with the system. They come in and bug us from time to time, but reality is that the Mullahs need us.”