As Further Sanctions Loom, Plunge in Currency’s Value Unsettles Iran
By RICK GLADSTONE
NYT
Iran’s currency, the rial, tumbled in value to its lowest level ever against the dollar on Tuesday in panic selling caused in part by the country’s increased economic isolation from international sanctions, an unbridled inflation problem and worries that government officials there are ideologically incapable of devising a workable solution.
The rial’s value has been weakening for months, but the traumatic drop on Tuesday reflected what Iranian economists called a new level of economic anxiety in the country, exacerbated by conflicting information coming out of the Tehran hierarchy that reinforced a sense of indecision and confusion.
A report in Iran’s state-run news media that the government had decided to suspend trading relations with the United Arab Emirates in retaliation for that country’s support of American sanctions on Iran — denied later by Iran’s vice president — apparently contributed to a rush by Iranian merchants and trading companies to sell their rials for other currencies. The United Arab Emirates is a major gateway for Iran’s exports.
“This is the most serious financial crisis they’ve faced, with multiple things coming to a head,” said Djavad Salehi-Isfahani, a professor of economics at Virginia Tech and an authority on Iran’s economy. “I have the feeling that really nobody is in charge of economic policy, nobody who can quickly think on their feet.”
(More here.)
NYT
Iran’s currency, the rial, tumbled in value to its lowest level ever against the dollar on Tuesday in panic selling caused in part by the country’s increased economic isolation from international sanctions, an unbridled inflation problem and worries that government officials there are ideologically incapable of devising a workable solution.
The rial’s value has been weakening for months, but the traumatic drop on Tuesday reflected what Iranian economists called a new level of economic anxiety in the country, exacerbated by conflicting information coming out of the Tehran hierarchy that reinforced a sense of indecision and confusion.
A report in Iran’s state-run news media that the government had decided to suspend trading relations with the United Arab Emirates in retaliation for that country’s support of American sanctions on Iran — denied later by Iran’s vice president — apparently contributed to a rush by Iranian merchants and trading companies to sell their rials for other currencies. The United Arab Emirates is a major gateway for Iran’s exports.
“This is the most serious financial crisis they’ve faced, with multiple things coming to a head,” said Djavad Salehi-Isfahani, a professor of economics at Virginia Tech and an authority on Iran’s economy. “I have the feeling that really nobody is in charge of economic policy, nobody who can quickly think on their feet.”
(More here.)
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