Irans currency hits record low amid tensions with West

Iran’s currency hits record low amid tensions with West

The devaluation of the rial comes amid simmering tensions with the West and ongoing protests in Iran.

Tehran, Iran – The Iranian currency has hit an all-time low amid rising tensions with the West and unrest sweeping the country.

The US dollar crossed the 450,000 riyal mark for the first time on the open market on Sunday.

Former Central Bank of Iran governor Ali Salehabadi was sacked after the rial’s rapid devaluation in late December earlier, falling to more than 440,000 against the greenback on the open market.

His successor, Mohammad Reza Farzin, had vowed to artificially keep the currency used for importing essential goods at 285,000 riyals to the dollar to keep prices stable during a 40 percent inflation rate.

“Today, the central bank has no restrictions on currency and gold reserves, and the main reason for currency fluctuations is media hype and psychological operations in society,” Farzin said on Saturday.

As the rial went into another free fall on Saturday, the central bank claimed that 300 million euros ($326 million) of Iranian money had been received in Iraq and injected into the market despite US sanctions.

Central bank raises exchange limit

On Sunday, the central bank announced that it will soon raise the maximum amount of currency that can be sold to one person annually from €2,000 ($2,176) to €5,000 ($5,439) to show there is no shortage of currency there.

The cap was introduced after the US unilaterally abandoned the 2015 Iran nuclear deal with world powers in 2018 and imposed tough sanctions, sparking a new currency crisis in Iran.

To combat currency devaluation, Iranian police have regularly announced the arrest of dozens of currency speculators in recent months.

This week’s devaluation of the rial comes amid simmering tensions with the West and amid ongoing protests in Iran that began last September and that Tehran accuses the West of orchestrating.

Earlier this week, the European Parliament overwhelmingly approved a resolution calling for the Islamic Revolutionary Guard Corps (IRGC) to be labeled a “terrorist” organization and sanctions against Supreme Leader Ayatollah Ali Khamenei, President Ebrahim Raisi and others impose.