Iran records record deterioration. And sanctions make matters worse
The Iranian currency recorded a record decline on Sunday, with a rate of 100,000 riyals per dollar amid growing economic difficulties and an imminent return to the US sanctions regime.
The unofficial exchange rate reached 102,000 riyals to the dollar by midday, according to the Ponest website, one of the most reliable sites to monitor Iranian currency prices.
A currency agent confirmed the price of the currency “to AFP,” asking not to be named.
The riyal lost half of its value against the dollar in just four months, surpassing the 50,000 mark for the first time in March.
The government sought to fix the price at 42,000 in April, and threatened to pursue black market traders.
But that trade continued amid the Iranians’ concern about the continued difficulties of the economy, and turned their currency to the dollar as a safe way to maintain their savings, or as an investment if the riyal continued to decline.
While banks generally refuse to sell the dollar at a low price, the government was forced to soften its position in June and allow greater flexibility for certain categories of importers.
The way to deal with the cash crisis was one of the reasons that prompted President Hassan Rouhani to appoint a new governor of the Central Bank of the place of Waliullah Saif.
One of the reasons for the currency’s deterioration was the announcement by the United States in May of its withdrawal from the nuclear deal signed with Iran in 2015, which lifted a set of sanctions in return for curbing Iran’s nuclear program.
The United States is preparing to re-impose its full sanctions on two payments on August 6 and November 4, forcing many foreign companies to suspend their activities with Iran.