Iran's currency hits all-time low amid economic crisis, nuclear deal impasse

By Syed Zafar Mehdi

TEHRAN, Iran (AA) – Iran’s national currency plummeted to an all-time low against the US dollar on Sunday, triggering chaos in the country's forex market and economic circles.

The stuttering rial traded below 600,000 to the greenback in the free market for the first time ever as foreign currencies, including the US dollar and British pound, rallied against it.

The depreciation in the Iranian currency's value has continued in recent months amid anti-government protests and a stalemate in nuclear deal talks.

People have been queuing up in front of forex exchange shops in the Iranian capital in recent weeks to buy dollars, which has prompted many shops to down their shutters.

The turbulence in the country's forex market has also pushed the inflation rate higher, reaching 53.4% in January, according to the Statistical Center of Iran (SCO).

After languishing in the channel of 500,000 to 550,000 in recent days, the rial nosedived on Sunday, entering the 600,000 channel, sending shockwaves in the forex market.

Market analysts had warned about the national currency entering the 560,000-580,000 channel, but breaching the 600,000 mark came as a shock to many.

Other foreign currencies, including the Euro and British pound, also crossed new frontiers on Sunday, breaching the 700,000 mark.

At the time of filing this report, the price of the US dollar in the free market had relatively stabilized, bouncing back to 560,000 against the US dollar, gaining 40,000 rials after the central bank's intervention.

Amid the depreciating currency, speculation was also rife on Sunday that Economy Minister Ehsan Khandouzi will be replaced, weeks after the central bank governor was removed by the government.

Iran has been rocked by protests in recent months, triggered by the death of a 22-year-old Iranian woman, Mahsa Amini, in mid-September while in police custody.

In the wake of the protests, the US and the European Union have imposed several rounds of sanctions against Iranian officials and state entities.

Before the protests, the rial was trading at 298,200 to the US dollar, losing a significant value in recent months.

The protests, which Iranian authorities said were instigated by the US and its European allies, fueled fresh tensions between Tehran and Washington and virtually put negotiations aimed at the revival of the 2015 nuclear deal on the back burner.

Importantly, Iran's currency has seen a ten-fold devaluation since 2015 when the nuclear accord was signed between Iran and world powers.