Iranians Rushed to illegal Traders as Rial Drops to Record Low of 119,000 to the US Dollar

 

TEHRAN – Iran’s currency traded at a fresh record-low of 119,000 to the dollar on Tuesday, a loss of nearly two-thirds of its value since the start of the year as US sanctions loom.

The Iranian rial has lost nearly two-thirds of its value since the start of the year

The Iranian rial has been crashing in recent days as the country anxiously awaits the reimposition of full US sanctions, starting on August 6.

It hit 100,000 to the dollar for the first time on Sunday and continued its decline, losing 18% of its value in less than two days.

On January 1, the dollar was worth 42,900 rials.

The government has been in crisis mode, replacing its central bank chief last week.

The central bank issued a statement on Monday, blaming the currency volatility on the “enemies’ conspiracy” and vowing fresh counter-measures “in the coming days”.

In April, the government tried to fix the value of the rial at 42,000, but black-market rates exploded as Iranians rushed to illegal traders, seeking to protect their savings by buying dollars, or investing in the hope that the rial would continue to fall.

With banks often refusing to sell their dollars at the artificially low rate, the government was forced to soften its line in June, allowing more flexibility for certain groups of importers.

Having announced in May that it was pulling out of the 2015 nuclear deal, the US is set to reimpose its full range of sanctions in two stages on August 6 and November 4, 2018.

Source: Agence France-Presse