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Iranian currency crashes

2023-02-21T07:19:56.992Z


Iran is increasingly politically isolated and the economic crisis is worsening. One consequence: if you want to buy around one euro in the country's exchange offices, you now have to put 530,000 riyals on the table.


Enlarge image

Notes with many zeros: A money changer on a street in Tehran (picture from December 2022)

Photo: Alaa Al-Marjani/ REUTERS

The Iranian currency has continued to plummet after new EU sanctions.

In the country's exchange offices, the dollar exchange rate broke through the 500,000 riyal mark for the first time on Tuesday.

The euro exchange rate rose to around 530,500 rials.

On Monday, the EU imposed new sanctions on those responsible in Iran for serious human rights violations in the context of the most recent protests.

According to financial experts, sanctions and Iran's political isolation are a major reason for the devaluation of the rial.

The deadlocked negotiations to revive the 2015 Vienna nuclear deal have also unsettled traders in the foreign exchange market.

The future of the nuclear deal is uncertain.

In the past ten years, the rial has lost more than 90 percent of its value against the euro.

The trigger for the women's protests was the death of the Iranian Kurd Jina Mahsa Amini.

She died in police custody in mid-September after being arrested by the Morality Police for breaking Islamic dress codes.

The protests have plunged the political leadership into one of the worst crises in decades.

Central bank announces "currency center".

The population also suffers from inflation rates of 50 percent.

Many Iranians are therefore looking for the safest possible investment opportunities for their money - and buy currencies such as euros and dollars.

This puts additional pressure on the rate of the local currency, the rial.

The Iranian central bank is trying to counteract this.

She announced the opening of a new "foreign exchange center" to give citizens easier access to foreign exchange.

In this way, the central bank is also trying to get the reins of action back in its own hands.

The problem so far: The exchange rate on the street and in many exchange offices differs significantly from the rate officially set by the central bank.

It is about "making the set course the market rate," according to central bank chief Mohammad Reza Farzin.

beb/dpa

Source: spiegel

All business articles on 2023-02-21

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