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Iran's rial hits an all-time-low against the US dollar
Iran's currency, the rial, fell almost 10% on Monday to a record low against the dollar, leaving it with a loss of 25% in one week.
The fall suggests economic sanctions imposed over its disputed nuclear programme are hitting economic activity ever harder. The latest slide appears to have been triggered by a government move to supply dollars to importers of certain basic goods at a special rate in an attempt to rein in the currency slide, but the move has had the opposite effect. A weaker domestic currency makes imports more expensive, raising prices for people inside Iran. Dramatic currency falls can also lead to uncertain markets as dealers hoard the harder currency in the hope that it will gain even more in value. Iran is all but frozen out of the global banking system as a result of largely US-led sanctions designed to discourage what it says is Iran's attempts to build a nuclear weapon. These sanctions, which are backed by the European Union, include a ban on the trade of Iranian oil. Posted by: tipper 2012-10-01 |
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