Iran’s currency, rial, reached another historic low on Saturday, breaking through the 650,000 threshold and dropping to 653,000 per US dollar, as tensions increased with Israel.
The plunge, the highest ever exchange rate recorded for the American currency in Iran, marks a nearly 30 percent decline for the rial since early January.
The recent Israeli airstrike on Iran’s consulate in Damascus, resulting in the deaths of two high-ranking IRGC commanders and five officers, has further escalated tensions. The Iranian regime has vowed retaliation in response to the attack.
Since the 1979 revolution, the devaluation of the Iranian rial has been an ongoing trend, particularly escalating in 2018 after the US withdrew from the JCPOA nuclear deal and imposed sanctions on Iran’s oil exports and banking sector.
The rial was valued at 70 rials per dollar in 1978. The devaluation has exacerbated inflationary pressures over the past five years, leading to millions of Iranians falling below the poverty line. While official government figures indicate an annual inflation rate of over 40 percent, many experts believe the actual rate to be higher.
Iranian authorities have often claimed that US and other sanctions have little impact on the nation’s economy. However, as annual inflation hovers around 50 percent for five consecutive years, tens of million of people have lost their middle-class status and have to subsist with around $200 a month. Meanwhile, Supreme Leader Ali Khamenei has not allowed negotiations to limit Iran’s nuclear program to move forward and Tehran has intensified its regional interventions contributing to high tensions.
