Photo: AP Photo/Franklin Reyes
The Iranian rial plunged today against the U.S. dollar as western sanctions against the state’s oil exports are really starting to up the pressure on Iran.Earlier today, the rial was down 7 per cent against the dollar, meaning it had lost a quarter of its value in just the past week.
However, it continued to drop throughout the day, losing more than 13 per cent, according to the Jerusalem Post.
Israeli finance minister Yuval Steinitz said the Iranian economy is now “on the verge of collapse.” Via The Guardian:
Israel’s finance minister, Yuval Steinitz, said Iran’s economy “is not collapsing, but it is on the verge of collapse”. The loss of oil revenue would approach $45bn-$50bn (£28bn-£31bn) by the end of the year, he told Israel Radio. “The Iranians are in great economic difficulties as a result of the sanctions.”
His comments followed the leak last week of an internal foreign ministry report, which said international sanctions were having a profound effect on Iran’s economy and could be destabilising the government. But the measures had yet to persuade the regime to abandon its nuclear programme and, therefore, additional sanctions were needed.
According to an anonymous Israeli official quoted in Haaretz, Israel had stepped up efforts to persuade the EU to impose a fresh round of sanctions.
BBC analyst Sebastian Usher wrote that the plunge in the rial was so bad today that Iranian websites that publish exchange rates for the rial blacked out quotes for the currency’s price on the website:
The Iranian rial is in freefall. The collapse was so precipitous that Iranian currency websites blanked out the rate.
Usher also provided some colour on what it’s like on the ground in Iran right now as fallout from the collapse of the real ensues:
International attention may be focused on the country’s alleged ambitions for a nuclear bomb, but for ordinary Iranians it is the economy that is the real issue.
Inflation is raging, making some basic foodstuffs prohibitively expensive. Economic sanctions, led by the US and European Union, have played a key role. Iran has been all but frozen out of the global banking system, with its oil exports slashed.
But government mismanagement has also played its part. A government exchange centre undercutting the black market rate, launched just last week, has only made things worse. Opposition websites are castigating the authorities, with one website accusing the central bank of being incapable of getting the situation under control.