Iran currency value plunges past psychological barrier

TEHRAN, 21 Feb 2023:

The Iranian rial yesterday hit a historic low amid international sanctions against Iran and the ongoing fallout from street protests.

The rial fell to 501,300 to the US dollar, crossing the symbolic 500,000 barrier for the first time, according to the Bonbast free market tracker and confirmed by currency exchange offices in Tehran.

The Islamic Republic of Iran’s currency has shed 60% of its value since mass demonstrations broke out in September last year over the death in police custody of Kurdish woman Mahsa Amini following her arrest for alleged incorrect use of the obligatory headscarf.

In mid-September, US$1 bought 280,000 rials but by December that had risen to 440,000.

Iran’s central bank set the official exchange rate at 42,000 rials per US dollar following the revival of US sanctions on Tehran in 2018, when former president Donald Trump withdrew from the 2015 nuclear pact.

Ongoing negotiations to rescue the deal, which saw Tehran swap in much of its atomic programme for a partial easing of sanctions, are stalled.

The sanctions and government actions are fanning an economic crisis in the oil and gas rich nation.

Iranians face an acute cost of living crisis with runaway inflation rates hitting 50%.

This discontent was one of the catalysts for the mass street protests that erupted in September. Some 500 people have died in the subsequent state clampdown, according to NGOs.