June 30, 2021
Iran’s battered currency rial has reached new lows since the election of Ebrahim Raisi, a hardliner president, in a controversial vote which saw his main rivals barred from contesting the vote on June 18.
The rial on Wednesday was trading above 250,000 to the US dollar in Tehran’s unofficial exchange market. The currency’s fate is tied to the chances of a deal with the United States on lifting crippling sanctions imposed by former president Donald Trump when he pulled of the 2015 nuclear deal in 2018.
President Joe Biden’s administration wants to return to the deal and has entered indirect talks with Iran in Vienna since April. As the talks were set to begin, the rial rose in April by 20 percent, nearing 200,000 to the US dollar, but as negotiations dragged out and presidential election neared, the currency again began losing value.
Before the Islamic Republic was established in 1979, the dollar was 72 rials and in 42 years it has declined 3,500-fold. But the fastest decline occurred in 2018 when Trump imposed sanctions and reduced Iran’s oil exports, a lifeline for its government, which resorted to printing money and fueling inflation. Prices are rising to the tune of 50 percent annually impoverishing millions of Iranians.
Labor strikes that started last week among oil and refinery workers threaten to spread to other sectors and put further pressure on the government. Many workers have not been paid for months.