The exchange rate of the Iranian rial against the US dollar reached a historic minimum, deepening the decline that began six months ago. The exchange rate of the Iranian currency decreased, despite the hopes raised by the lifting of the international sanctions. Definitely the decreasing local currency negatively impacts people’s lives. Lots of foreign goods are imported into our country, and many of the things people need come from abroad.
In June, the US dollar was worth on the open market at rate of 34,600 rials, while today its prices reached 41,300 rials, representing a decrease of nearly 20%. The official rate is only 32,300 rials per dollar.
The strong depreciation of rials accelerated after the election in November of Donald Trump for president of the United States. Trump criticized the nuclear agreement signed in July 2015, providing for the abolition of economic sanctions against Tehran, and in November circumvent with associates who have a hostile attitude towards Iran. Many analysts think Washington will stop short of abolishing the deal, but it may apply remaining sanctions on Tehran more stringently. At the very least, uncertainty over Washington’s intentions could make companies around the world more cautious about trading with or investing in Iran.
At the same time, pro-growth policies in Iran have boosted money supply. This has changed the proportion between the local currency and foreign currency, increasing the exchange rate.
Iranian officials have denied any link between the US election result and the rial’s slide. Samad Karimi, head of the exports department at the central bank, blamed the slide on a temporary surge in demand for dollars for travel and trade at the end of the year.