Iran’s Currency Keeps Sliding, Losing About 13% in Less Than Two Weeks

At a time when many in Iran had hoped that the memorandum of understanding signed with the U.S., the reopening of the Strait of Hormuz, and the lifting of the American blockade would help stabilize the local economy, foreign exchange market data points in the opposite direction. The Iranian currency continues to weaken steadily, and in less than two weeks it has lost about 13% of its value against the U.S. dollar.

On the free market today (Thursday), the Iranian rial was trading at around 1.8 million rials to one U.S. dollar — a sharp drop compared with the rate of about 811,000 rials to the dollar recorded just a year ago.

At the time the memorandum of understanding between Iran and the U.S. was signed, the Iranian rial was trading at about 1.52 million rials to one U.S. dollar. But since then, the devaluation trend has continued, and in the days that followed, the dollar’s exchange rate in Tehran markets climbed to about 1.7 million rials to the dollar.

At the same time, pressure on Tehran has continued through a naval blockade imposed earlier this month by the U.S., after Iran placed restrictions on vessels passing through the Strait of Hormuz — one of the world’s most important trade and energy routes. According to reports, ship traffic in the area has shrunk significantly, hurting the flow of goods and trade ties with key partners, including China and the United Arab Emirates.