A leader in Iran’s foreign exchange sector has been arrested just one day after he was removed from office at the Central Bank.
Ahmad Araghchi, who worked at the Central Bank of Iran as a Vice-Governor with specific responsibility for forex, was just one of many people who were arrested in what appears to be a concerted judicial effort to combat alleged fraud.
In a statement from Gholam-Hossein Mohseni Ejeie, a spokesperson for the Iranian judiciary, Araghchi was arrested alongside several unnamed currency brokers, as well as a government clerk.
He had been removed from office at the bank in the immediate run-up to his arrest, regional media is reporting.
It is unclear what exact form the alleged fraud has taken.
The arrest of Araghchi and the other alleged participants is not the first time that accusations of forex fraud have hit the Middle East.
Just across the Persian Gulf in Saudi Arabia, for example, a report released in July found that one group of scammers were trying to imitate major Polish broker XTB in Saudi Arabia and pose as its official representatives in order to defraud traders.
In April of this year, three people were also given prison sentences of several hundred years in nearby Dubai over a forex scam. Ryan D’Souza, Sydney Lemos and Valany Lemos, who were behind financial services firm Exential, were each given 500-year sentences as punishment for their role in the scam. The firm had previously enjoyed a high profile in Dubai, where it occupied offices in the Arenco Tower in the Media City area of town.
However, the move to arrest Araghchi in particular comes as Iran responds to ongoing economic problems by reducing its previously tough rules on the way that foreign exchange can be imported into and traded in the country.
A Sunday evening programme on the Iranian state broadcaster revealed a number of major measures which would be taken, including giving the right to sell hard currency to the country’s exporters.
Currently, Iran places limits on how much cash can be brought into the country at customs and border checkpoints, and it restricts the amount of gold which can be brought in as well. This will also change as a result of the new announcement, and it will now be possible to bring in unrestricted amounts.
Another restriction which looks set to be amended is the one which was previously in place on selling currency at floating fee levels. Now, bureaux de change and other currency exchange outlets will be able to offer this service to those who are going abroad.
Additionally, as part of the Iranian government’s attempts to allow people to use hard currency for certain purchases, it will now be on offer at a reduced charge for essential items such as medical supplies.
Part of the reason that Iran is looking to take these steps is as a result of major problems for the country’s currency, the Iranian rial, which has suffered significantly against the US dollar in recent weeks.
Whether these developments relate to the recent arrest of Ahmad Araghchi, however, remains to be seen.