Iran’s rial hit another record low Sunday, deepening economic pressure. Iran’s central bank moved to support the currency.
Iran’s rial fell to another record low against the U.S. dollar on Sunday, extending a steep decline that has intensified pressure on households and businesses already facing high inflation and shortages. The dollar traded at about 2.723 million rials on Iran’s open market, according to Iran International, up about 1.3% from the previous day. The euro also moved above 3.06 million rials, while the British pound surpassed 3.59 million rials.
The latest decline followed a record low reported Saturday, when the dollar was trading at roughly 2.688 million rials, according to Reuters. Iran’s central bank announced that state-owned banks would sell as much as $2 billion in foreign currency in an effort to support the rial, which Reuters reported had lost more than half its value over the previous year.
The currency weakness has added to an already severe inflation problem. Iran International reported that official September figures showed consumer prices were 89.8% higher than a year earlier, while average inflation over the preceding 12 months reached 73.6%. The weakening rial raises the local cost of imported goods, including medicines, machinery, raw materials and other products that businesses and consumers depend on.
The deterioration has unfolded amid intensified U.S. economic pressure on Iran, including sanctions and restrictions affecting the country’s oil exports. Reuters reported that the economic strain and a naval blockade have reduced access to foreign currency and added pressure to the government’s finances. Many Iranians have responded by seeking to protect savings through purchases of U.S. dollars, other foreign currencies or gold.
Iranian authorities have continued efforts to stabilize the currency as its decline feeds into prices and purchasing power. The central bank’s dollar sales represent an attempt to increase foreign-currency supply, but the rial continued to weaken into Sunday, reaching a new low on the open market.
Information was reported by Reuters and Iran International, with currency-market figures and economic data attributed to the original providers.