Iran’s currency hits record low

Iran’s currency fell to a record low on Sunday, falling to 613,500 to the dollar as people celebrated the Persian New Year.

People tried to exchange rial for foreign currency at the main exchange shop center on Firdow West Street in Tehran on Sunday, but most shops were closed due to the Nowruz holiday from March 20 to April 2.

Mohsen, a 32-year-old employee at an exchange shop, said the holidays were one of the reasons for the low prices. “The prices are not real and the demand to buy dollars is very high, but there are only a few exchange shops” open. ” He and other Iranians spoke on the condition that their last names not be used because of the possible repercussions of speaking to foreign media about the country’s economic woes.

The two-week holiday is an opportunity to travel abroad, driving demand for the dollar and euro.

Mojitaba, the 49-year-old father, was shocked: “The rial has dropped 5% compared to the past six days, while the whole country is on holiday!”

Wife Niloufar, 28, and husband Behzad, 30, said they booked a week-long trip to Turkey at a discount but were now considering spending as much as a full-price trip.

Exchange rates strongly influence other markets, including housing and rentals.

On March 18, the last working day before the holiday, the price was 590,000 to 1 US dollar.

Many Iranians have lost their life savings as the local currency depreciated. Today, its value is about one-twentieth of what it was in 2015, when Iran signed a nuclear deal with world powers.

It has since fallen from 32,000 rials to the dollar to hundreds of thousands. In February 2023, the real hit a low of 600,000 reals to the US dollar and has not risen above 439,000 reals since then.

The government statistics center expects the country’s inflation rate in February 2024 to be 42.5%, while the central bank said it was over 46%. There is no explanation for this difference.

Relations between Iran and the West have been at an unusually low point since then-U.S. President Donald Trump abandoned a deal that would have required Iran to end its nuclear program in exchange for freezing funds and other benefits. U.S. President Joe Biden said he was willing to renegotiate the nuclear deal with Iran, but formal talks trying to find a roadmap to restart the deal collapsed in August 2022. At the same time, tensions in the Middle East have increased significantly, leaving the nuclear deal in a deadlock. Diplomacy with Iran is more complicated. Iran further angered Western countries by providing Russia with armed drones for use in its invasion of Ukraine.

In the past, dire economic conditions have stoked widespread anger against the government but also forced many Iranians to focus on food and clothing rather than engaging in high-stakes politics amid a harsh crackdown on dissent.

The rial’s record low comes less than a month after parliamentary elections that saw the lowest turnout since the 1979 Islamic Revolution and were dominated by hardline politicians.

Hardliners have controlled parliament for the past two decades and chants of “Death to America” ​​are often heard during meetings.