The Middle East Channel

Suffering from sanctions, Iran’s currency plunges to a record low

Battered by international sanctions over its nuclear development program and domestic instability, the Iranian rial plunged to a new low on Monday. After a dramatic decline last week, the rial fell between 13 and 18 percent on Monday, to as low as 33,500 rials to the U.S. dollar. The rial is not traded on the ...

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An Iranian woman pays a 20000 rial banknote (around 70 US Cent), bearing a portrait of Iran's late founder of islamic Republic Ayatollah Ruhollah Khomeini, to a grocer in Tehran on September 30, 2012. Iran's currency, the rial has lost over 60 percent of its value since the end of last year, as draconian Western economic sanctions take effect that has spurred already high inflation to even greater heights, with food costs soaring more than 50 percent. AFP PHOTO/ATTA KENARE (Photo credit should read ATTA KENARE/AFP/GettyImages)

Battered by international sanctions over its nuclear development program and domestic instability, the Iranian rial plunged to a new low on Monday. After a dramatic decline last week, the rial fell between 13 and 18 percent on Monday, to as low as 33,500 rials to the U.S. dollar. The rial is not traded on the global currency markets, so an accurate value can’t be determined). It fell a further nine percent on Tuesday. According to some Iranian traders, the sharp decline was due, in part, to firm statements from the United States and Israel at the United Nations General Assembly as well as the Iranian central bank’s implementation of a new currency exchange on September 24. According to the chairman of financial trading house Pakzad Consulting Corp, "The sharpening of the rhetoric could lead some to think we’re closer to a military strike." He continued that for speculators, "this is a perfect opportunity to make money." Iran’s worsening financial situation has sparked divisions in the Iranian government. Iranian President Mahmoud Ahmadinejad blamed the crisis on financial authorities for mismanaging currency in a news conference in New York last week. Conversely, on Sunday, a member of the Iranian Parliament’s economic commission accused Ahmadenijad of mismanaging the currency market. Iran’s currency has reportedly lost over 80 percent of its value since 2011. Expanded U.S. and EU trade sanctions have resulted in an estimate 45 percent decline in Iranian income from oil exports.

Syria

Addressing the U.N. General Assembly Monday, Syrian Foreign Minister Walid Moallem accused world powers, particularly the United States, France, Turkey, Saudi Arabic, and Qatar, of supporting terrorists, interfering in Syria, and pursuing "new colonial policies." The United States is providing the Syrian opposition with $45 million of "nonlethal aid" including communications equipment. Saudi Arabia and Qatar have been accused of supplying weapons to the opposition. While officials have said the opposition should be armed, the countries have not admitted to providing weapons. Additionally, Moallem called for refugees to return to Syria saying foreign entities have fabricated a refugee crisis. The U.N Refugee Agency announced Tuesday that the number of Syrians registered, or awaiting registration, as refugees in Jordan, Lebanon, Turkey, and Iraq has reached 311,500. Meanwhile, fierce clashes have continued across Syria. Opposition forces reportedly killed 18 Syrian soldiers in an ambush in the northwestern town of Salqeen, where government air strikes killed an estimated 30 people. Fighting has spread in Aleppo. Opposition fighters fired rockets at the municipality building on Monday attempting to keep civil servants from going to work. Conditions in the city have declined dramatically with public services largely collapsed, police offices abandoned, and many neighborhoods without water and electricity. President Bashar al-Assad was in Aleppo on Tuesday, according to Lebanese pro-regime newspaper Al-Diyar, and ordered an estimated 30,000 soldiers to move into the city from Hama. However, the report could not be verified. 

Headlines  

  • Anti-Christian graffiti was spray-painted in Hebrew on the gate of the Christian Monastery of Saint Francis on Mount Zion in an apparent pro-settler extremist "price tag" attack.
  • A cameraman who accompanied Iranian President Mahmoud Ahmadinejad to New York for the U.N. General Assembly, Hassan Gol Khanban, has defected and applied for asylum.
  • Swedish furniture giant IKEA has apologized for releasing a special catalogue in Saudi Arabia with women removed from some of the photos.
  • Turkey is exhuming the body of former President Turgut Ozal in Istanbul on Tuesday over suspicions that his 1993 death while he was in office was due to poisoning.

Arguments and Analysis

Attack in Libya Represents Subtle But Meaningful Shift in Threat to American Interests‘ (Nada Bakos, The Huffington Post)
"The recent attack on the U.S. Consulate in Benghazi likely represents a subtle but meaningful shift in the extremist threat to American interests: the catastrophic attacks on American soil at the start of this century are likely to be much less common than the attacks abroad that we witnessed in the 1990s. A consequence of this shift should be a reconsideration of not just our counter-terrorism strategy, but a re-examination of the risk response calculus that we, as a country, are willing to accept in the course of our pursuit, promotion, and protection of interests abroad."

Road Show‘ (Laura Secor, The New Yorker)

"Iran policy is a conundrum for the United States. Every four years, we hear otherwise-that it is only want of courage or good sense that prevents us from bringing the Islamic Republic to heel. But our options are bad, our objectives are ambiguous, and the Iranian people stand as hostages between their government and ours. The Ahmadinejad show may be over. But Groundhog Day has only just begun."

–By Jennifer Parker and Mary Casey 

 

 Twitter: @casey_mary

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