Iran's currency slumps to another all-time low amid unrest

By Syed Zafar Mehdi

TEHRAN, Iran (AA) – Iran’s national currency rial continues to lose ground against the US dollar, slumping to the lowest-ever rate recorded in the country's open market on Sunday amid months-long protests.

The stumbling rial traded above 411,000 to the greenback on bonbast foreign exchange website on Sunday as US dollar and other foreign currencies fiercely rallied against it.

It is the first time in the country's history that the rial has breached the 400,000 threshold, sparking concerns in the foreign exchange market and financial circles.

Since mid-September, when young Iranian woman Mahsa Amini's death in police custody triggered countrywide protests, Iran's currency has lost almost 20% value, according to market analysts.

In his remarks last week, Central Bank Governor Ali Salehabadi blamed the turbulence in the forex market on the ongoing protests, while also noting other destabilizing factors, including US sanctions.

He, however, pledged to inject more dollars into the market to restore order, saying the central bank will act both as a "market-maker and hard currency policy-maker".

The move, however, didn't work as the country's parliament on Sunday summoned Salehabadi and Iran's finance minister and government spokesman Ehsan Khandozi.

Khandozi assured lawmakers that the apex bank is mulling measures to restore stability in the forex market, while blaming "enemies" for turning their focus to banks and the forex market after "failing to close markets", referring to recent nationwide strikes.

Parliament Speaker Baqer Ghalibaf, however, was scathing in his criticism of the central bank, saying the situation in the forex market is "not acceptable to people".

Iran has been rocked by widespread protests in recent months in the wake of Amini's death, sparking fresh tensions between Tehran and Western countries and resulting in fresh sanctions against the country.

On Friday, Germany said it was downgrading relations with Iran and suspending trade promotion programs, citing the "very serious situation" in the country.

The depreciation of Iran's currency also comes amid a standoff over talks in Vienna aimed at salvaging the 2015 nuclear deal and reports about Iran supplying drones to Russia for use in the Ukraine war.

It is worth noting that since May 2018, when the former US administration walked out of the nuclear deal, Iran's currency has seen a seven-fold devaluation, which has fueled the country's economic crisis and worst inflation.