The rial’s plunge to 575,000 against the US dollar Saturday exacerbated chaos in several of Iran's major markets and brought many businesses to near standstill.

The government’s official rate of 417,500 for the dollar on Saturday meant very little. Availability of foreign currency at that rate is very limited which drives buyers to the curbside black market.

Fluctuations in the foreign currency exchange rates have immediate effect on the prices of several other commodities including gold, jewelry, and vehicles -- which many Iranians buy for investment or to preserve the value of their savings -- as well as electronic devices such as computers and smart phones and even home appliances.

The property market usually reflects the changes in exchange rates after a period of around 30 days but buyers and sellers both appear very apprehensive as the rial has been rapidly falling daily for about a week. No one can be certain how far the currency will fall and is not sure about any business decision.

The deep plunge of the rial has also affected many businesses where pricing is not as obviously reflective of foreign currency rates, as is the case with mobile phones and cars.

The price of mobile phones, for instance, rose sharply Saturday with many retailers preferring to hold on to their stock in anticipation of further fall of the rial. According to Etemad newspaper, an iPhone 13 Pro Max which sold for one billion rials ten days ago was priced at 1.2 billion on Thursday when the dollar traded around 560,000 on the street. The price of other brands and models such as Samsung phones has also risen accordingly.

Mohammad Mokhber, Iran's economy czar

Some textile retailers and goldsmiths in the Grand Bazaar of Tehran, for instance, closed their shops Saturday afternoon as the rial continued to fall. In such circumstances, retailers as well as wholesalers are too reluctant to sell for the fear of not being able to replenish their stock with the ‘worthless’ money they earn.

The country is also suffering from an inflation rate of well over 50 percent.

The parliament held an extraordinary, closed session with First Vice President Mohammad Mokhber Saturday morning regarding rials fall and the chaos it has created for businesses.

Once again, Mokhber insisted that the problems which already existed when the administration of President Ebrahim Raisi took over in August 2021 are “gradually diminishing” and that the foreign currency market “will soon be stabilized” while the governor of the Central Bank of Iran (CBI), Mohammadreza Farzin, told lawmakers that only the rates announced by the bank’s new portal were “real”.

Many, however, believe that the rial’s depreciation will continue as long as the Islamic Republic does not reach an agreement with world powers over its nuclear program that can lift sanctions, and stop provoking the international community with rash remarks and statements.

Economy Minister Ehsan Khandouzi tried to convince the parliament that “hidden hands” were responsible for the chaos in the market and that these “saboteurs have been identified.” Security, intelligence, and judiciary bodies will soon deal with these people, he said.

The Islamic republic has resorted at times of similar to hanging individuals whom it accused of “corruption on earth” through their economic activities including destabilizing the foreign currency and gold markets at. Officials also usually accuse foreign governments and “enemies” whenever upheavals in the markets cause popular discontent.

In November 2018, Vahid Mazloumin, who came to be known in the media as “The Sultan of Gold Bullions” and another businessman Mohammad-Esmail Ghasemi were hanged in Tehran after being convicted of “creating a network to destabilize the country’s economic, foreign currency, and financial systems by conducting illegal transactions and large-scale smuggling of foreign currency and gold bullions.”

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