In a sign of economic difficulties and a possible currency crisis, Iran’s rial has plunged — from an already-historic low — almost 20% in recent days.
On Monday morning the rial is at almost 60,000:1 v. the US dollar, compared to about 50,000:1 at this time last week. It fell 6% on Sunday alone.
The Iranian Students News Agency said exchange shops stopped trading as the Rial closed on 60,000:1 yesterday. It said this caused further problems, as street dealers sold dollars “at any price they desired”.
The currency dropped below its all-time low of about 45,000:1 last month. The Central Bank intervened with an interest-rate rise to try and halt the slide to the symbolic mark of 50,000:1, and authorities threatened to detain speculation and unofficial currency traders. However, the measures failed to stem long queues demanding foreign currencies or to spur savings in rials.
The drop has now shattered the official rate of about 33,000:1 set by the Rouhani Government as it pursued economic recovery after the July 2015 nuclear deal. The new crisis appears to have been spurred by threats of US withdrawal from the agreement and new, widespread sanctions. However, it also reflects ongoing weakness in production, investment, and trade, with the unemployment rate rising, especially among youth.
Fars, the outlet of the Revolutionary Guards, blamed the emotional reaction of “worried investors” and the public. The hardline Mashreq pointed at “dollar dealers” and “exchange shops that hoard dollars”. Press TV cites “Donald Trump’s hostile rhetoric”.