Iran’s currency is in free fall, Iranians are ditching it for American Dollars and the Ayatollah is powerless to stop it. The Iranian “rial” hit a record low on Sunday of 100,000 to the dollar amid a deepening economic crisis and the imminent return of full US sanctions.
The unofficial rate stood at 102,000 rials by midday, according to Bonbast, one of the most reliable sites for tracking the Iranian currency.
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. Iranians, it seems, trust the American economy under President Trump, more than it’s own leaders.
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 President Trump’s announcement in May that the U.S. was pulling out of the 2015 nuclear deal. That deal, agreed to by President Obama but never brought before Congress for approval, lifted certain sanctions in exchange for curbs to Iran’s atomic program. The Obama administration also gave $1.8 Billion in cash to the main sponsor of terrorism in the world.
The US is set to re-impose its full range of sanctions in two stages on August 6 and November 4, forcing many foreign firms to cut off business with Iran.
It is not known how Europe will respond as they have been movoing to protect the Iranian terrorist regime because of deep economic ties to the country.