The Iranian rial is collapsing: it has lost 63.8% in the past month. The Iranian people are waiting in line to withdraw their money from their banks and the world is watching to see how their leaders will handle this situation. Time will show us whether Iran’s government will collapse due to economic pressure or if they will start a war to redirect their people’s focus. Wag that dog: gold, silver and the US stock markets are all up today.
The Iranian rial fell to a record low against the dollar on Tuesday following U.S. President Barack Obama signing a bill on imposing fresh sanctions against the country’s central bank.
The new U.S. sanctions, if fully implemented, could hamper the world’s major oil producer’s ability to sell oil on international markets.
The exchange rate hovered at 17,200 rials to the dollar, marking a record low. The currency was trading at about 10,500 rials to the U.S. dollar last month.
Some exchange offices in Tehran, when contacted by Reuters, said there was no trading taking place until further notice.
“The rate is changing every second … we are not taking in any rials to change to dollar or any other foreign currency” said Hamid Bakhshi in central Tehran.
Imposing sanctions on Iran’s central bank would tighten the screw and make it more difficult for the world’s fifth biggest oil exporter to receive payments for exports — particularly oil, a vital source of hard currency forIran.
Sharp rial fluctuations are linked to the foreign sanctions imposed on Iran since 2006 over its disputed nuclear programme, coupled with high inflation and concerns over potential military strike by the United States and Israel.
The United States and Israel have not ruled out military option if diplomacy fails to resolve Iran’s nuclear dispute. Tehran denies the West’s claim that it is after nuclear bomb, saying its response to any military strike will be firm.
Some analysts suggest that the government is making profit out of the souring price of dollar but the currency drop has created concerns among ordinary Iranians.
Iran’s economy is 60 percent reliant on petrodollars and any sanctions imposed on its oil income will put further pressure on the country’s ailing economy.
“I have some savings in my account … I am trying to withdraw it and change all of it to dollars,” said housewife Zohreh Ghobadi, while waiting in a long line at a bank.