Iran’s rial hits new low on unofficial market

Economy comes under pressure due to coronavirus pandemic and US sanctions

DUBAI:

The Iranian rial fell to a new low against the US dollar on the unofficial market on Saturday and has now seen its value fall by almost half in 2020 as the economy comes under pressure from the coronavirus pandemic and US sanctions.

The dollar was offered for as much as 255,300 rials, up from 242,500 on Friday, according to foreign exchange site Bonbast.com. The economic daily Donya-e-Eqtesad’s website gave the dollar rate as 252,300 rials, compared with 241,300 rials on Friday.

The currency has lost nearly 48% of its value in 2020, more than half of that in the past month, as a drop in oil prices and a slump in the global economy have deepened the economic crisis in the country, which also has the highest death toll in the Middle East from the pandemic. The official exchange rate - used mostly for imports of state-subsidised food and medicine - is 42,000 rials per dollar.

In May 2018, President Donald Trump withdrew the United States from a multilateral deal aimed at curbing Iran’s nuclear programme and reimposed sanctions that have since battered the economy.

President Hassan Rouhani, who has partly blamed the rial’s drop on the failure of exporters to repatriate their foreign currency earnings, instructed the central bank on Friday to redouble its efforts to enforce rules on returning export earnings, state media reported.

In the months after May 2018 the rial’s value tumbled as Iranians snapped up dollars, fearing Washington’s withdrawal from the nuclear deal and sanctions could shrink Iran’s vital oil exports and severely impact the economy. The currency recouped some of its losses in late 2018.

Published in The Express Tribune, July 19^th, 2020.

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