The Iranian currency started the new Iranian week on Saturday with another decline, trading above 10,500 rials to the dollar.
This is another indication that the new foreign currency market policy of the government has failed to stop the rapid decline of the rial.
Last week, President Hassan Rouhani’s government reversed its ban on free trading of hard currencies, which had been in place since April and allowed people to buy dollars from forex exchanges.
For a day or two it seemed the dollar would stay under 9,500 rials but soon the demand for the greenback pushed its value to over 10,000 rials. The dollar had closed the week on Thursday at 10,500.
Websites reporting actual, real-time trading showed the dollar briefly reaching as high as 11,000 rials, Saturday morning.
The Iranian currency began it fall late last year and the decline accelerated in March. President Donald Trump’s withdrawal in May from the nuclear deal with Iran signalled impending U.S. sanctions and the rial did not stand a chance to rebound.
The dollar traded under 70 rials before the 1979 revolution.
The government’s official rate for importers and companies with approved requests for dollars stands at 4,200 rials. This is an indirect subsidy from the country’s foreign currency holdings to help keep prices low for foodstuffs, medicines and other essential goods.