Iran’s Currency in Free-fall as U.S. Sanctions Loom
Iran’s currency plunged to a record low on Sunday, dropping to about 110,000 rials to the U.S. dollar in trading on the unofficial market, as the global economy braces for the renewal of American sanctions on the Islamic Republic. The rial has lost almost half of its value since President Donald Trump in May pulled the U.S. out of the Iran nuclear deal; this, as multi-national companies begin exiting Iran amid growing demand for the greenback among Iranians who fear looming sanctions. The first batch of U.S. restrictions is slated to go into effect on August 6, barring, among other things, Tehran’s trade of gold, precious metals and automotive parts. In November, additional sanctions will target Iran’s crucial energy and shipping industries. Tehran remains engaged in negotiations with European capitals, along with Russia and China, to devise an economic mechanism that will offset the impact of Washington’s policy; however, in the absence of a follow-up agreement or the granting of U.S. sanctions waivers, analysts predict that Iranian oil exports could fall by as much as two-thirds by the end of the year.