The Rial has depreciated amid the country’s increasing isolation over its disputed nuclear program, human rights violations and the transfer of armed “suicide drones” to Russia to help it in its war against Ukraine.
By Erin Viner
The United States dollar (USD) was equivalent to 601,500 Rials (IRR, ﷼) on Iran’s unofficial market at the start of the week, compared with 575,000 on the previous day and 540,000 on Friday, according to foreign exchange site Bonbast.com.
Faced with the prospect of further economic hardship, Iranians have been turning to USD and other hard currencies or gold to protect their savings.
The Ayatollah regime has blamed the currency crash on “a plot” by its enemies to destabilize the Islamic Republic after months of unrest sparked by the death in custody of a young Kurdish woman on 16 September 2022.
Widespread mass anti-government demonstrations erupted in Iran after the death of Mahsa Amini following her arrest for attire deemed insufficiently Islamic, in one of the boldest challenges since the 1979 Islamic Revolution.
Iran’s inflation rate has soared above 53% and rising prices since Amini’s death.
With protests in the Sunni-populated areas of the Islamic Republic are ongoing, demonstrations elsewhere have waned in the past few weeks despite ultimatums issued by IRGC, which has crushed dissent in the past with the support of its religious volunteer Basij militia.
The clerical leaders fear economic misery could ignite more protests when Iran faces mounting Western pressure over issues ranging from “brutal” clampdown on unrest, its disputed nuclear program and the war in Ukraine, where Western states say Russia has used Iranian drones.
The decreasing likelihood of salvaging the 2015 Joint Comprehensive Plan of Action between Iran and world powers since talks stalled last year could also mean that crippling economic sanctions re-imposed by Washington when it ditched the pact in 2018 will continue to weigh on Iran’s economy.
To calm the market and ease demand for USD, last Saturday Iran’s Central Bank lifted a ban on private exchange shops selling hard currencies.