Iran’s currency sank to a new historic low on Saturday, reflecting the fragile — and possibly collapsing — economy amid internal problems and US sanctions.
The posted open-market rate of the Rial v. the US dollar is about 77,500:1. Some reports from Tehran said the currency had broken the 80,000:1 mark.
The Rial has now lost about half its value since January, when it fell below the previous historic low of about 45,000:1, set in 2011-2012 amid tightening US and international sanctions.
The Rouhani Government has pursued a series of measures, including higher interest rates on savings, a switch to the Euro as the official recording currency, and arrests of unofficial currency traders. It tried to unify the official and open-market rates, setting it at 42,000:1. But the steps have only led to shortages of foreign currency, including the closure of exchange offices, as the Rial passed the 50,000:1, 60:000:1, and finally 70,000:1 levels.
Donald Trump’s May 8 announcement of US withdrawal from the July 2015 nuclear deal, with the promise of expanded US sanctions by November, has further depressed the Rial. The Government’s attempts to get guarantees of trade and investment by foreign companies, particularly from Europe, have been unsuccessful so far amid American threats to punish any foreign firm with US links that continues business with the Islamic Republic.
The Supreme Leader has taken recourse in injunctions to Iranians to embrace his “Resistance Economy” of self-sufficiency while calling on the Government to come up with plans to bolster the economy.