Iran’s currency has dived 18 percent since anti-regime protests started

Iran’s currency weakened to a record low on the unregulated market as investors scrambled to buy dollars after more sanctions were imposed on the country because of its support for Russia and a deadly crackdown on protests.

The rial slumped to an average of 384,000 to the US dollar on Tuesday, the highest level ever recorded, according to two traders in Tehran and a local website that monitors foreign currency rates.

On Monday, the European Union announced fresh penalties against Iran for its military drone deliveries to Russia and its violent suppression of months-long protests. The UK also imposed more sanctions on Tuesday because of Tehran’s backing of Moscow’s war on Ukraine.

The rial has lost 18 percent of its value since mid-September, when protests erupted across the country after the death in custody of a young woman who’d been arrested for allegedly flouting Islamic dress codes.

The rial has been plummeting since 2018 when the US exited the nuclear deal and reimposed tough sanctions on Iran and its oil exports.

Government efforts to control currency markets at the time also backfired and high inflation has significantly eroded people’s disposable incomes over the past several years. Prices surged at one of the fastest paces on record in June.

A trader in Tehran said the rial’s depreciation was in part due to a surge in demand for foreign currencies as domestic instability weighs on businesses and the removal of sanctions remains a remote prospect.

“Foreign currencies, especially the dollar, remain in high demand at any rate as buyers look to keep up with rising inflation,” Saeed, a trader based in Tehran, who didn’t want to give his surname because of the sensitivity of speaking with foreign media, said by phone.

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