The rial’s devaluation comes amid simmering tensions with the West and ongoing protests in Iran.
Tehran, Iran – Iran’s currency has hit a record low amid rising tensions with the West and unrest in the country.
On Sunday, the US dollar crossed the 450,000 riyal mark for the first time in the open market.
Ali Salehabadi, the former head of Iran’s central bank, was ousted in late December after the rial’s previous rapid devaluation, which saw it fall to more than $440,000 against the dollar on the open market.
His replacement, Mohammad Reza Farzin, had promised to artificially keep the currency pegged at 285,000 riyals to the dollar for imports of essential goods in an attempt to keep prices stable amid 40 percent inflation.
“Today, the Central Bank has no restrictions in terms of currency and gold reserves, and the main reason for currency fluctuations is media noise and psychological actions in society,” Farzin said on Saturday.
As the rial plunged into another free fall on Saturday, the central bank announced that 300 million euros ($326 million) of Iranian money in Iraq had been received despite US sanctions and injected into the market.
The central bank will increase the exchange rate
The central bank announced on Sunday that it will soon raise the maximum amount of currency that can be sold to an individual annually from 2,000 euros ($2,176) to 5,000 euros ($5,439) in a clear sign that it has no shortage of currency.
The restriction was imposed after the US unilaterally withdrew from the 2015 Iran nuclear deal with world powers in 2018 and imposed tough sanctions, triggering a new currency crisis in Iran.
In order to fight against the devaluation of the currency, the Iranian police have regularly announced the arrest of dozens of currency speculators in recent months.
This week’s devaluation of the rial comes amid simmering tensions with the West and continued protests in Iran that began in September last year, which Tehran accuses the West of orchestrating.
Earlier this week, the European Parliament overwhelmingly approved a resolution calling for the Islamic Revolutionary Guard Corps (IRGC) to be designated a “terrorist” organization and sanctions against Supreme Leader Ayatollah Ali Khamenei, President Ibrahim Raisi and others.