Iranian currency dips to historic low amid sanctions, pandemic, foreign policy decisions

Oct 6, 2020

Iran’s currency dropped to its lowest value ever against the US dollar last week amid crushing sanctions by Washington, a disastrous response to the coronavirus pandemic and a string of disjointed foreign policy efforts that have caused distrust in the regime and caused money to flee the country.

On Thursday, the rial fell to 300,000 to the US dollar; it had been at 262,000 only a few weeks before. That’s an enormous drop from 2015, when the rate was just 32,000 rials to the dollar.

The rial’s value has fallen almost in half this year, and 30% in the last three months alone. A portion of the drop is due to a major slump in oil prices and a downturn in the global economy triggered by the coronavirus pandemic.

Even before the pandemic, domestic consumption was the only thing going for the regime economically as heavy international sanctions were already hurting the country, said Alex Vatanka, the director of the Middle East Institute’s Iran Program. But the pandemic spiraled the situation into disaster. 

“They didn’t have a fallback position and that meant they had to keep their local economy going,” he said. “That’s why they were so reluctant to close down business and to tell people to stay home, the usual things that a lot of countries decided to do.”