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Iran's Currency Tumbles On Forex Markets

U.S. and Iranian bills on display in Tehran.
U.S. and Iranian bills on display in Tehran.
Iran's rial currency plunged more than 7 percent in open-market trading on October 1, falling to a new all-time low of 32,250 rial to the U.S. dollar.

Traders and currency-tracking websites showed the rial had lost about one-quarter of its value since a week ago, when it was trading at 24,600 to the dollar.

Moments after information about the rial crash was posted to financial tracking websites, the data was censored in Iran.

Tehran last week launched what it calls an "exchange center" intended to stabilize Iran's currency.

But traders said it appeared instead to be contributing to market turmoil.

The value of the rial, already sliding during the past year, has accelerated downward during the past month as the effects of tougher Western sanctions over Iran's nuclear program are felt.

The U.S. State Department said on October 1 that the plummeting value of Iran's currecy shows the success of international sanctions.

The State Department said the sanctions, designed to halt Tehran's suspected nuclear program, were cutting "deeper and deeper" into the Iranian economy.

Israeli Finance Minister Yuval Steinitz told Israel Radio on September 30 that "the sanctions on Iran in the past year jumped a level."

He added, "It is not collapsing, but it is on the verge of collapse. The loss of income from oil there is approaching $45 billion to $50 billion by the year's end."

Based on reporting by Reuters and AFP
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Comment Sorting
by: Feridoun
October 01, 2012 11:57
Sanctions make sense if the people can put pressure on their government. But in Iran people can only suffer. Officials are probably even making money with black market now.

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