RFERL:

Every day, hundreds head to Tehran's bustling Ferdowsi street to buy foreign currency, only to find that many exchange offices have shut up shop, have turned off their currency-rate displays, or have signs up reading, "We don't have U.S. dollars to sell."

A nationwide dollar-buying panic is in full swing, spurred by the plunging value of the Iranian rial, a sluggish economy, and fears that the United States will reimpose crippling sanctions on the Islamic republic.

With the rial hitting all-time lows, the government has imposed an official exchange rate of 42,000 rials against the dollar, set a cap on the amount of foreign currency that citizens can hold outside banks, and sent police to patrol exchange shops to ensure that no under-the-table currency trading is going on.

But economists say the new currency measures will be difficult to maintain. Exchangers are hoarding U.S. dollars, and Iranians who require foreign hard currency for business or travel are already defying the government and turning to the black market, where the rate has skyrocketed.

"A few days ago, I went to several exchange offices to buy $300," a Tehran businessman who did not want to reveal his name told RFE/RL's Radio Farda. "But I couldn't even purchase $100. So I was forced to buy several hundred dollars on the black market. I paid 58,000 rials for $1."

Iran's currency has lost close to half its value on the free market since September, when the dollar was at 36,000 rials. The currency hit a record low of 60,000 on the free market last week.

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