The rich rules over the poor, and the borrower is the slave of the lender. Proverbs 22:7 (The Israel Bible™)
In just four months the value of Iran’s currency, the rial, has dropped by half—now it takes 102,000 rial to buy a dollar—Agence France-Presse reported on Monday. In March, the rial’s value had dropped to the point that it cost 50,000 rial to buy a dollar.
The latest reported drop of the rial comes ahead of expected sanctions to be imposed by the United States on Iran on Aug. 6.
The unofficial rate was confirmed by an anonymous trader to AFP.
The government set an official rate of 42,000 rials for a dollar in April and threatened to crack down on those trading currency on the black markets. But Iranians still wanted to buy dollars, either to preserve their wealth, or even as an investment, as the rial continued to fall.
Bloomberg reported that the continuing devaluation of the rial, already damaged by “from years of sanctions, mismanagement and corruption,” is nearing collapse.
The disparity between the official and actual rates of the rial has allowed importers to “profiteer” by importing goods at the official exchange rate and then selling them priced in rials at the higher unofficial rate.
In a statement released on Monday, Iran’s central bank blamed the economic uncertainty on “plots by the nation’s enemies to create unrest in the economy.”
Last week, the government replaced Valiollah Seif, the governor of the central bank, effectively blaming him for the nation’s economic straits.
Iran has been taking action against those taking advantage of the rial’s fall.
The police have been chasing black-market traders from their bases of operation. The government has also announced the arrests of 29 people for what it calls “disturbing” the nation’s economy and its “money and currency systems.”