Irans Currency Hits New Low Due to US Sanctions and Blockade

Iran’s National Currency Hits New Lows Amid Naval Blockade

Tehran, Iran - The Iranian rial has plummeted to new lows on the open market, with its value reaching 1.81 million to the US dollar by early afternoon on Wednesday. This follows a partial recovery earlier in the week.

The currency’s rate had previously been around 811,000 per US dollar a year ago and 1.54 million earlier this week. The rial remained relatively stable over the past two months after experiencing an earlier drop as US forces amassed in the lead-up to the US-Israeli war on Iran.

The latest decline is attributed to unchecked inflation, which has been plaguing the Iranian economy due to mismanagement and sanctions. The US naval blockade of Iran’s southern waters has also disrupted trade with some of the country’s largest partners, including China and the UAE.

Iranian authorities have mobilized to mitigate the impact of the blockade, allocating $1 billion from the sovereign wealth fund to purchase essential goods. They have also reduced red tape for border provinces to import goods and made a partial policy U-turn to restart offering a preferential subsidized exchange rate.

According to customs data, Iran’s non-oil trade has been negatively affected, with commercial ties disrupted or cut off as a result of the war. The total value of non-oil trade in the Iranian calendar year that ended on March 20 was close to $110 billion, with $58 billion going to imports.

The US and Israel have directed strikes against ports, naval facilities, airports, and railway networks across Iran, as well as oil and gas facilities, power stations, and major industrial zones. The US is also using its military capabilities and economic chokeholds to drive down Iran’s oil exports.

Iran’s customs authority reported a 16 percent decrease in non-oil trade compared to the previous year, with a drop of about 29 percent in connection with the war. The volume of non-oil trade was valued at approximately $9 billion for the 11th month of the calendar year ending on February 19 and $6.46 billion in the final month.

The US has three aircraft carriers in the region and is bringing in more troops and equipment as Israel expresses readiness to restart fighting, three weeks after a ceasefire began.

Source: Al Jazeera