Iran’s Currency In Freefall

Iran’s currency has experienced another steep fall against the U.S. dollar, with each dollar buying more than 20,000 rials.

Tehran money traders report that on Thursday, the dollar was trading at 20,050 rials, similar to the rates observed last winter, when news of sanctions on Iranian oil heralded sharp fluctuations in the Iranian currency market.

Back in January, the dollar was trading at over 20,000 rials, but with news of resumed nuclear talks between Iran and the world powers, the exchange rates bounced back somewhat, with the dollar trading at 16,500 rials. However the lack of headway in the talks appears to have once again dragged down the value of Iran’s currency.

The head of Iran’s Central Bank has called for calm, assuring the public that there is no shortage of foreign currencies in the market. Yesterday, Mahmoud Bahmani said: “The public must not take heed of rumours and be influenced by the psychological atmosphere created by opportunists.”

The Iranian currency’s latest decline come just ahead of the EU oil embargo on Iran, which takes effect on July 1, and there is little prospect of any breakthrough in the nuclear negotiations scheduled for next month in Istanbul.