| 18 April 2024, Thursday |

Iran’s currency slides to record low as savers buy dollars

Despite efforts by the central bank to reduce demand for foreign currency from savers concerned about inflation and the country’s economic prospects, the value of the Iranian rial fell to a historic low versus the dollar on Saturday.

Against the dollar, the rial was selling at 575,000 on the unofficial free market, up from 540,000 on Friday, according to the currency exchange website The rate was listed as 575,000 on the website as well.

With annual inflation running at more than 50%, Iranians have been trying to protect the value of their savings by buying foreign currency or gold.

Seeking to cool the market and ease demand for dollars, the central bank on Saturday lifted a ban on private exchange shops selling hard currencies.

Last week, it opened an exchange center to allow ordinary Iranians to purchase foreign currency, but some market analysts said the move had yet to dampen appetite for greenbacks.

“While some analysts expected that, with the opening of this center, emotional trading on the free market would decrease, the dollar continued its upward movement … and the fervor has become even more intense on the futures market,” economic website Ecoiran said.

The rial has lost nearly 45% of its value since nationwide protests following the death in police custody of a young Kurdish Iranian woman began in September.

One of the major threats to theocratic government in Iran since the Islamic revolution in 1979 has come from the turmoil.

According to currency dealers, the turmoil, Iran’s growing isolation due to Western sanctions over its human rights record, and Russia’s use of Iranian-made drones in Ukraine are all contributing factors to the rial’s decline.

By restricting Tehran’s access to foreign cash and oil exports, President Donald Trump’s 2018 reimposition of U.S. sanctions has hurt Iran’s economy.

Iranian economic prospects have gotten worse since September when negotiations between Iran and foreign powers to limit Tehran’s nuclear program in exchange for the easing of sanctions broke down.

  • Reuters