Iran's rial hits record-low 1,00,000 to the dollar
Monday, July 30, 2018 IST
HIGHLIGHTS
*The Iranian rial fell to 1,12,000 to the dollar on Sunday, from 98,000 to $1 on Saturday
*The rial has lost half its value against the dollar in just four months, having broken through the 50,000-mark for the first time in March
TEHRAN: Iran's currency is continuing its downward spiral amid a deepening economic crisis and the imminent return of full US sanctions.
The Iranian rial fell to 1,12,000 to the dollar on Sunday, from 98,000 to $1 on Saturday. The government-set exchange rate was 44,070 to the dollar, compared to 35,186 on January 1.
The rial has lost half its value against the dollar in just four months, having broken through the 50,000-mark for the first time in March.
The government attempted to fix the rate at 42,000 in April, and threatened to crackdown on black market traders.
But the trade continued with Iranians worried about a prolonged economic downturn turning to dollars as a safe way to store their savings, or as an investment in the hope the rial will continue to drop.
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.
The handling of the crisis was one of the reasons behind last week's decision by President Hassan Rouhani to replace central bank chief, Valiollah Seif.
The currency collapse was encouraged by the US announcement in May that it was pulling out of the 2015 nuclear deal, that lifted certain sanctions in exchange for curbs to Iran's atomic programme.
The US is set to reimpose its full range of sanctions in two stages on August 6 and November 4, forcing many foreign firms to cut off business with Iran.
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