February
26, 2023
Iran's
currency fell to a record low against the U.S. dollar on the unofficial market
on Sunday, amid the country's increasing isolation over its disputed nuclear
programme, human rights violations and the supply of drones to Russia.
The
U.S. dollar was fetching as much as 601,500 rials on Iran's unofficial market
on Sunday, compared with 575,000 on the previous day and 540,000 on Friday,
according to foreign exchange site Bonbast.com.
Iranian
authorities have blamed the currency's fall on "the enemies' plot" to
destabilise the Islamic Republic after months of unrest sparked by the death in
custody of a young woman on Sept. 16.
The
rial has lost nearly half of its value since the start of nationwide protests,
the boldest challenge to theocratic rule since the 1979 Islamic Revolution.
With
protests in the Sunni-populated areas of Iran persisting, demonstrations in
other parts of the country have waned in the past few weeks amid the state's
harsh crackdown on protests.
The
clerical leaders fear economic misery could ignite more protests when Iran
faces mounting Western pressure over issues ranging from "brutal"
clampdown on unrest, its disputed nuclear programme and the war in Ukraine,
where Western states say Russia has used Iranian drones.
Iran
denies supplying drones to Russia for use in the Ukraine war.
The
decreasing likelihood of salvaging Tehran's 2015 nuclear pact with world powers
amid stalled talks since last year could also mean that crippling economic
sanctions re-imposed by Washington when it ditched the pact in 2018 will
continue to weigh on Iran's economy.
Faced
with the prospect of further economic hardship, Iranians have been turning to
dollars and other hard currencies or gold to protect their savings amid an
inflation above %53 and rising prices.
To
calm the market and ease demand for dollars, the central bank on Saturday
lifted a ban on private exchange shops selling hard currencies.
Iran’s currency hits new low amid anti-government protests
February
26, 2023
Iran’s
currency fell to a new record low on Sunday, plunging to 600,000 to the dollar
for the first time as the effects of nationwide anti-government protests and
the breakdown of the 2015 nuclear deal continued to roil the economy.
Iranians
have formed long lines in front of exchange offices in recent days, hoping to
acquire increasingly scarce dollars. Many have seen their life savings
evaporate as the local currency has deteriorated. Inflation reached 53.4% in
January, up from 41.4% two years ago, according to Iran’s statistics center.
The
dire economic conditions have contributed to widespread anger at the
government, but have also forced many Iranians to focus on putting food on the
table rather than engaging in high-risk political activism amid a fierce
crackdown on dissent.
Iran’s
currency was trading at 32,000 rials to the dollar when it signed the 2015
nuclear accord with world powers. The agreement lifted international sanctions
in return for strict limits on and surveillance of its nuclear activities.
The
agreement unraveled when then-President Donald Trump unilaterally withdrew the
U.S. from it and restored crippling sanctions. Iran responded by ramping up its
enrichment of uranium, and now has enough for “several” atomic weapons if it
chooses to develop them, according to the U.N.’s nuclear watchdog.
Iran
insists its nuclear program is entirely peaceful, but experts say it had a
nuclear weapons program until 2003 and is developing a breakout capacity that
could allow it to quickly build an atomic weapon should it decide to do so.
The
Biden administration supports a return to the 2015 agreement, but negotiations
hit an impasse last year and appear to have ground to a halt. Iran has further
angered Western countries by supplying armed drones to Russia that have been
used in its invasion of Ukraine.
Meanwhile,
Iran has seen waves of anti-government protests since the September death of a
22-year-old Kurdish-Iranian woman who was detained by the morality police for
allegedly violating Iran’s strict Islamic dress code.
The
protests rapidly escalated into calls for the overthrow of Iran’s ruling Shiite
clerics, marking a major challenge to their four-decade rule. Iran’ has blamed
the unrest on foreign powers, casting it as an extension of the sanctions,
without providing evidence.
The
Trump administration had hoped that maximum sanctions would force Iran to make
major concessions on its nuclear activities, its ballistic missile program and
its military involvement in countries across the Middle East, but it has yet to
do so.
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