Insider news & Analysis in Iran

By INU Staff

INU - Worries that U.S. actions will cripple Iran’s economy appear to have caused the country’s rial to lose 35 percent of its value against the dollar. Iran’s rial hit a record low early this week.

Panic followed, and many Iranians rushed to exchange offices to buy foreign currencies. The government announced a unified rate of 42,000 rials to the dollar, in an attempt to halt the slide, during which the dollar was reportedly going for 60,000 rials on the black market.

Several unauthorized money-exchange offices were shut down, and at least a dozen people were accused of attempting “to disrupt the foreign-exchange market” and arrested.

These measures apparently fell short for Grand Ayatollah Nasser Makarem Shirazi. In response to the currency crisis, the hard-line cleric has called for the execution of “several key money changers.” From his base in the religious city of Qom, Shirazi stated that money changers should be executed for stoking “unrest.” Semi-official ISNA news agency quoted him as saying on April 11th, “Several key money changers should be put on trial for spreading corruption on earth and executed according to Islamic principles.” He added, “The recent events regarding foreign currency demonstrate that a new plot is under way where hypocrites inside the country are working hand in hand with their foreign masters to plunge the country into chaos and paralyze the economy.”

The front page of the reformist daily Etemad ran this headline, “Proposed Solution Of Ayatollah Makarem Shirazi To Deal With Currency Market Main Disruptors: Execute [Them],” alongside a photo of the cleric.

The Iranian Central Bank issues licenses for currency exchange offices, but there are unlicensed traders that feed a black market for hard currencies. Currency exchanges are typically used by businesspeople who must travel overseas, or by ordinary Iranian parents whose children go abroad to study.

U.S. President Trump’s threat to pull the United States out of the 2015 nuclear deal under which Tehran limited sensitive nuclear work in exchange for sanctions relief. The deal, also known as the The Joint Comprehensive Plan of Action (JCPOA) was signed by UN Security Council permanent members China, France, Russia, and the United Kingdom, plus Germany and the European Union.

Uncertainly over the future of the deal, along with an escalation of tensions in the region, factor into the currency crisis, as well as the unrest at the turn of the year, when Iranians took to the streets across the country. Initially, the protests showed anger over rising prices and other economic issues, but soon calls for regime change were voiced and heard.

Supreme Leader Ayatollah Ali Khamenei and other senior officials have laid the blame for that unrest on foreign enemies.

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