Iran’s Rial
Nearing Collapse Ahead of Renewed Sanctions
By JNS July 31, 2018 , 5:33 pm
The rich rules over
the poor, and the borrower is the slave of the lender. Proverbs 22:7 (The
Israel Bible™)
Iran Rial currency banknotes with Iran landmarks in the
background. (Credit: Minda photos/Shutterstock.com)
In just four months the value of Iran’s currency, the
rial, has dropped by half—now it takes 102,000 rial to buy a dollar—Agence
France-Presse reported on
Monday. In March, the rial’s value had dropped to the point that it cost 50,000
rial to buy a dollar.
The latest reported drop of the rial comes ahead of
expected sanctions to be imposed by the United States on Iran on Aug. 6.
The unofficial rate was confirmed by an anonymous trader to
AFP.
The government set an official rate of 42,000 rials for a
dollar in April and threatened to crack down on those trading currency on the
black markets. But Iranians still wanted to buy dollars, either to preserve
their wealth, or even as an investment, as the rial continued to fall.
Bloomberg reported that
the continuing devaluation of the rial, already damaged by “from years of
sanctions, mismanagement and corruption,” is nearing collapse.
The disparity between the official and actual rates of
the rial has allowed importers to “profiteer” by importing goods at the
official exchange rate and then selling them priced in rials at the higher
unofficial rate.
In a statement released on Monday, Iran’s central bank
blamed the economic uncertainty on “plots by the nation’s enemies to create
unrest in the economy.”
Last week, the government replaced Valiollah Seif,
the governor of the central bank, effectively blaming him for the nation’s
economic straits.
Iran has been taking action against those taking
advantage of the rial’s fall.
The police have been chasing black-market traders from
their bases of operation. The government has also announced the arrests of 29
people for what it calls “disturbing” the nation’s economy and its “money and
currency systems.”
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