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Iran’s currency sinks to record lows amid protests

The rial continues to hit new lows after another shaky year amid ongoing protests and a lack of progress in reviving the nuclear deal.

Tehran, Iran Iran’s embattled national currency has hit a new record low amid ongoing protests and a lack of progress in efforts to restore the country’s 2015 nuclear deal with world powers.

The US dollar rate broke above the 350,000 mark against the Iranian rial for the first time on the open market at the start of the business week on Saturday. The rial continued its decline, falling to around 362,000 to the dollar later in the day.

The Iranian government still maintains a drastically lower artificial rate of 42,000 riyals to the dollar as its official figure, even after a subsidy reform plan earlier this year that eliminated the use of this rate for imports of a number of goods. essential.

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The dollar changed hands at a rate of around 300,000 riyals in early September, but the Iranian currency has been on a declining trajectory since nuclear talks once again stalled and nationwide protests erupted in mid-September after of the death of a young man. woman in police custody.

Iranians are protesting the death of 22-year-old Mahsa Amini after she was detained by morality police last month in Tehran.
Iranians are protesting the death of 22-year-old Mahsa Amini after she was detained by morality police last month in Tehran. [File: AP Photo]

When the nuclear deal was signed in 2015, the Iranian rial sold for more than 10 times the amount of dollars it has today.

The Central Bank of Iran (CBI) said on Thursday it would pump more foreign currency into an official market that operates for importers and exporters, and to respond to “the real demands of the people.”

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CBI Governor Ali Salehabadi also tried to reassure the market by saying foreign currency supply “far exceeds” demand and the central bank enjoys strong foreign exchange reserves.

The latest drop in the value of the Iranian currency comes amid ongoing economic troubles and as the country continues to experience a persistent annual inflation rate of more than 40 percent, one of the highest in the world.

Food continues to see much higher price increases, with the latest report from the Center of Statistics of Iran earlier this week recording year-on-year increases of 289% and 138% in the prices of cooking oil and rice, respectively, for the month ending in October. 22

Meanwhile, the protests that gripped the country after the death of 22-year-old Mahsa Amini in “morality police” custody for allegedly wearing an inappropriate hijab continued on Saturday, with demonstrations reported in several universities across the country.

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Widespread internet restrictions that have been imposed since shortly after the protests began are also believed to have caused significant losses to Iranian businesses, but the exact extent remains unclear amid ongoing unrest.

Nuclear deal ‘deadlock’

The rial had experienced a period of relative stability earlier this year and had even regained some ground amid news that a deal to restore the nuclear deal may be close. The currency plummeted after the United States withdrew from the nuclear deal in 2018 and imposed harsh sanctions.

But it began to lose value significantly again as Tehran and Washington were unable to agree on a deal, halting efforts to revive the deal, effectively postponing talks until after the next US midterm elections. .

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The imposition of new sanctions by the US and the European Union in the wake of weeks-long protests has further renewed the fighting, reducing the chances of a restoration of the agreement, as Tehran blamed the US for being behind the “riots”.

US officials have said in recent weeks that the Joint Comprehensive Plan of Action (JCPOA), as the deal is formally known, is not a priority at the moment, while Josep Borrell, US foreign policy chief The EU told reporters on Friday that the negotiations were at a “stalemate” and “there is nothing new”.

This contradicts claims by Iranian officials who have said the US has sent messages with the aim of getting a deal done quickly.

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Foreign Minister Hossein Amirabdollahian said on Saturday that Tehran has conveyed a message to Washington through the EU and expects a response within days.

He also said earlier this week that Iran would soon send a team to Vienna to continue talks with the International Atomic Energy Agency (IAEA) over the open case of unexplained nuclear materials found at various sites, something Tehran has said will need to be resolved. . before any agreement.

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