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RFL/RE – Iran’s currency fell to an unofficial record low against the U.S. dollar on December 26, extending a dramatic drop in the rial’s value in recent months that has prompted concerns about the country’s economy.
The street value of the rial reportedly hit 41,500 to the dollar on December 26, compared to 35,570 in September and beating the previous low of around 40,000 recorded in 2012.
The fall has coincided with the rise of the dollar’s strength against other currencies in recent weeks and economists have attributed the situation to economic uncertainties over the effects of a Donald Trump presidency in the United States and Iran’s own presidential elections set for next year.
Economic officials have argued that the fall does not indicate a devaluation of the rial, but Reuters suggested on December 26 that the situation could harm Iran’s ability to attract foreign investment.
Iranian hardline newspapers, meanwhile, have criticized the administration of President Hassan Rohani for trying to maintain an artificial rial-dollar rate.
The Iranian Fars news agency argued this week that, as a result, trade and the effort to reach single-digit inflation are in jeopardy, while Khorasan has suggested that allowing the currency to weaken could improve the competitiveness of domestically produced products and be useful as an “anti-recession policy.”
Based on reporting by Reuters, Fars, IRNA, and Khorasan
