Sign In / Up

Add contribution as a guest

Your email will not be displayed publicly
Benefit of signing in/signing up to personalize comment

Comment as a guest

Your email will not be displayed publicly
Benefit of signing in/signing up to personalize comment


Not a member Register   Forgot Password
or connect using





Iran currency hits record low, crashing through 50,000 mark

By AFP 26/3/2018
A woman walks past a mural on the wall of the former US embassy in Tehran. File photo: Atta Kenare/AFP
A woman walks past a mural on the wall of the former US embassy in Tehran. File photo: Atta Kenare/AFP
By Eric Randolph

TEHRAN, (AFP) - The Iranian rial fell to a record low on Monday, breaking through the 50,000-to-the-dollar mark for the first time as analysts blamed uncertainty from Washington.

The rial has lost around a quarter of its value in the past six months, hitting 50,860 against the US dollar, according to Financial Informing Network, a trusted Iranian website for open market currency rates. 

The gap between that and the official rate, which stood at 37,686 on Monday, has continued to widen. 

Iran's government took drastic measures last month to stem the decline in the free market rate, arresting foreign exchange dealers, freezing speculators' accounts and raising interest rates.

But on the streets of Tehran, long queues continued to gather outside foreign exchanges in the run-up to this month's Nowruz New Year holiday.

"The issue is psychological rather than economic. There's no reason to buy dollars except in the hope that you can sell them later at a higher rate," said Esfandyar Batmanghelidj, founder of the Europe-Iran Forum, a business network.

He said Iranians were reacting to worrying news from the United States, where President Donald Trump this month appointed hardline anti-Iran figures Mike Pompeo and John Bolton to senior posts in his administration.

Many analysts believe Trump will pull out of the 2015 nuclear deal with Iran when it next comes up for renewal in May, bringing back crippling sanctions.

"I see many people looking to invest in neighbouring countries because this fear is spreading about the future of the JCPOA (nuclear deal)," said Navid Kalhor, a Tehran-based financial analyst.

Local officials have complained that Iranians are hoarding billions of dollars as local banks run short of cash.

"I have friends who go to banks and ask for 15 or 20 million rials ($300 or $400) and they're told to come back in a week because they're out of cash," said Kalhor.

- 'Very concerning' -

The devaluation poses a major problem for President Hassan Rouhani's government, which had hoped to attract massive foreign investment in the wake of the nuclear deal. 

Already facing huge obstacles from remaining, non-nuclear US sanctions, the collapsing currency will serve as another deterrent to potential investors, Batmanghelidj said. 

"Even in an instance where an investor is willing to operate in Iran, the devaluation is very concerning. If you invest now and the currency falls even 15 percent, you have to discount that from your returns, and that's very difficult to hedge against," he said.

"This will be difficult for the government. There is very little they can do about the mentality of individuals."

The government has resisted unifying the official and free-market rates of the rial because it would mean more expensive imports and therefore higher inflation.

But analysts say the gap has distorted trade and fuelled corruption. 

Perhaps the biggest challenge is that hoarding dollars has become a preferred way to store money amid economic uncertainty, especially after a housing boom stagnated after years of over-construction. 

Iranian banks have tried to counter this by offering interest rates as high as 20 percent.

But this has only fuelled wider problems in the economy by discouraging investors from putting their money into businesses. 

"The situation in the economy right now is far from beautiful," said Kalhor.


love Peshmerga, AK USA | 26/3/2018
people of Iran should rise up against theses Mullas who crippled Iran's economy. United State wants the best for people of Iran. but theses Mullas are getting in the way. for Iran to succeed. time has come for regime change and it should happen sooner than later.
Dutchman | 27/3/2018
Someone has to pay the Afghans, Russians, Iranians and other foreign fighters in an attempt to save the Assad minority regime. Assad is out of money, so now Iran is paying the Syrian bills.
Tahmores | 4/4/2018
@dutchman go to hell
Trinitysite | 9/4/2018
Well it’s just a wink from alah who is angry with the Iranians nothing more and nothing less. But could change towards worse as well as better. But there is no light at the end of the tunnel I fear.

Be Part of Your Rudaw!

Share your stories, photos and videos with Rudaw, and quite possibly the world.

What You Say

Renas | 4/25/2019 9:24:53 AM
Not Sulaimani police, PUk police. I don't know very much about NG, but the corruption in Kurdistan is really absurd. It is a bit ridicilous when...
High-level New Generation member arrested: Sulaimani police
| 6 hours ago | (1)
Kurdo | 4/24/2019 12:30:46 PM
jews actually saved turks from being molested and whiped out to protect the state of israel. aka ataturk. and his legacy is still there today. so our...
Mann | 4/25/2019 8:02:11 AM
@Kurdo If u love ur country and people so much, why u dont live in Kurdistan? Why u live in Europe? Its easy to talk like u, and live in...
Erdogan leaves parliament, blames HDP for not reciting Turkish anthem
| yesterday at 11:35 | (4)
John Bird | 4/25/2019 5:35:03 AM
Shaswar Abdulwahid appointed his sister Srwa as the head of the party’s public relations in Baghdad without considering anyone’s opinion within the...
New Generation dissidents demand separation of business, family, politics
| 17 hours ago | (1)
SOCIALISM XXL | 4/25/2019 4:20:32 AM
Only system that can secure the future of kurds and others in middle east is socialism. We tried everything else and the only positive feedback we...
Armenians in northern Syria establish armed force
| 19 hours ago | (1)

Elsewhere on Rudaw

We will accept ‘all’ Yezidis return in the community: Top spiritual council 2 hours ago |

We will accept ‘all’ Yezidis return in the community: Top spiritual council

The statement does not say if they will accept more
US loosens sanctions for interacting with IRGC-linked entities 4 hours ago |

US loosens sanctions for interacting with IRGC-linked entities

The change allows US officials and businessmen to more
0.485 seconds