Iran's Minister of Economic Affairs and Finance Ehsan Khandouzi

Iran Tries To Ignore Currency's Fall In Free Market

Friday, 02/23/2024

While Iran’s national currency shows no signs of bouncing back after a 13-percent fall since early January, Tehran says it does not recognize the free market exchange rates.

Minister of Economic Affairs and Finance, Ehsan Khandouzi, said Friday that “we certainly do not recognize the free market exchange rate officially.”

His remarks echo the regime’s propaganda line that the efforts to control the rial’s devaluation are effective. However, the rial has been hovering around 570,000 per dollar for ordinary people who have no access to currencies at the lower government rates.

Limited availability of foreign currency at the lower government rate has pushed buyers toward the unofficial black market. In an attempt to keep tabs on the unofficial foreign currency exchange market, the Iranian government has also criminalized a broad spectrum of "unauthorized" transactions, including those in the virtual space. However, these measures seem to have little impact on the currency's downward spiral. Currency exchange offices in Tehran are also forbidden from publicly disclosing rates.

The rial hit an all-time low late in January amid fears of US retaliation for a drone attack that killed three American servicemen in Jordan. The US dollar rose to nearly 600,000 rials, the highest since February 2022, when it briefly traded at that level.

The Iranian currency, which has steadily lost value since the 1979 revolution, has fallen about 13-fold since 2018, when then-president Trump pulled the United States out of the 2015 JCPOA nuclear deal and imposed sanctions on Iran’s oil exports and international banking. Since then, the dollar has risen from 42,000 to more than 570,000 rials. Before the establishment of the Islamic Republic in 1979, the dollar traded at 70 rials.

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