Why Is The Value Of Iranian Rial Decreasing? Does The Price Downturn Continue?

Date: Feb 21, 2023, 15:55

The value of Iran's Toman compared to the US dollar has reached its lowest level as a result of the increasing isolation of the Islamic Republic of Iran and the possible sanctions of the European Union against Iran.

Relations between the European Union and Tehran have recently deteriorated due to the failure to resume negotiations during recent months. With the arrest of some citizens of European countries, the government of the Islamic Republic of Iran has been severely criticized by the European Union for using force against the demonstrators and executing them.

According to diplomatic sources, while the European Union is discussing the fourth round of sanctions against Iran, the IRGC (Revolutionary Guards) may soon be added to the list of sanctions. But some members of the European Union want to go a step further and include the Revolutionary Guards in the list of terrorist organizations.

Since the mass protests after the murder of Mahsa (Zhian) Amini, a 22-year-old Iranian girl on September 16, the value of the Iranian Rial has decreased significantly against the dollar. Since the Islamic Revolution of 1979, these unrests have faced the Islamic Republic of Iran with various problems.

According to the economic website "Eco Iran", the reason for the continued decrease in the price of the Iranian Toman is the "global consensus" against Iran. This website claims that among the factors of the international consensus against Iran, we can mention the increase in political pressures on Iran, including the addition of the Islamic Revolutionary Guard Corps to the list of terrorist groups and the imposition of restrictions on Iranian ships and oil tankers (which probably affects the dollar rate in Iran).

The European Parliament pointed to Iran's Revolutionary Guards, which recently cracked down on protesters and sent drones to Russia, and the parliament asked the European Union to put it on its list of terrorist organizations. This phrase was a direct political message for Tehran, although the European Parliament cannot force the European Union to include the IRGC in it’s the terrorists’ list.

According to a high-ranking official of the Iranian Navy, a few days ago, the largest ship registry organization in the world, the Panama vessel registry, withdrew its flag from 136 ships associated with the state-owned Iranian oil company in the past four years.

The falling of the Iranian Rial’s value was attributed by Mohammad Reza Farzin, head of the Central Bank of Iran, to "psychological operations" that Tehran claims its enemies are organizing to destabilize the Islamic Republic of Iran.

Faced with an inflation rate of about 51%, Iranians who are looking for safe havens for their cash savings try to buy dollars, other currencies, gold or even other commodities.

In summary, it should be said that if the economic-political situation of Iran continues in the same way, the Iranian Toman will probably continue its downward trend and will make currencies, assets and various goods more expensive for Iranians.

IRR


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