Iran's Currency Falls With Fading Hopes Of A Nuclear Deal

An employee counting money at a foreign currency exchange in Tehran
An employee counting money at a foreign currency exchange in Tehran

Iran’s currency hit a new low against the US dollar in over two months, as nuclear talks remained deadlocked, with sanctions keeping pressure on the economy.

The US dollar rose to 280,000 rials on Monday from 260,000 on March 12, when signs emerged that negotiations in Vienna over reviving the 2015 nuclear agreement known as JCPOA were coming to a halt without an agreement.

Last December, the rial hit a low of more than 300,000 against the dollar but it gradually strengthened as hopes emerged of a nuclear deal that would lift US economic sanctions.

The Iranian government news website Monday morning claimed that a “high-level” regional official would visit Tehran on Tuesday to finalize the release of $7 billion frozen by South Korean banks. However, the foreign ministry spokesman immediately denied any knowledge of such a visit.

Any solid sign of blocked funds being released would boost the rial, which has fallen ninefold since late 2017, as former US president Donald Trump signaled his intention to withdraw from the JCPOA and impose sanctions on Iran.

Tehran has been claiming a 40-percent increase in oil exports in recent weeks, which have been partly confirmed by industry observers, but there are no positive signs of a financial windfall in Iran.

The falling currency has kept inflation at around 40 percent for more than a year, with food prices rising much faster, pushing wage earners into poverty. Even government-controlled media have been full of reports lately about food items rising in price to unaffordable levels.