Iran’s currency touches record low amid US squeeze

Dubai — Iran’s currency weakened below 1,000,000 rial per dollar on Tuesday as market participants saw no end in sight to sanctions under US President Donald Trump’s renewed “maximum pressure” campaign.

Trump said earlier this month he had sent a letter to Iran’s top authority, Supreme Leader Ayatollah Ali Khamenei, warning that the country’s nuclear programme could either be dealt with through negotiations or militarily.

Khamenei rejected the US offer for talks as a “deception” and Iranian foreign minister Abbas Araqchi said last week negotiations with Washington were impossible unless its policy changed.

The apparent diplomatic deadlock has raised fears of potential conflict, though Iranian officials have sought to assuage such concerns.

“I am certain there won’t be any war as we are fully prepared ... so that no-one will think about attacking Iran,” Araqchi said on Monday, during a meeting with the Iranian Red Crescent.

The rial dropped to a record low of 1,039,000 to the dollar according to Bonbast.com, which gathers live data from Iranian exchanges.

That represents a more than halving of the currency’s value since President Masoud Pezeshkian took office last year.

Facing an annual inflation rate of about 40%, Iranians seeking havens for their savings have been buying dollars, other hard currencies or gold, suggesting further headwinds for the rial.

The rial was valued at about 55,000 to the dollar in 2018, when US sanctions were reimposed by the first Trump administration to force Tehran to the negotiating table by limiting its oil exports and access to foreign currency.

The US has issued four rounds of sanctions on Iran’s oil sales since Trump’s return to the White House.

Reuters