December 16, 2022
The rial, which remained remarkably stable during the first six weeks of the latest protests, has now begun a precipitous fall, setting new records against the dollar on eight straight days starting October 31 and then plunging to new record lows in mid-December.
The rial was down to 394,700 as of December 17 a loss in value of 8 percent in just one month and an astounding loss in value of 51 percent since President Raisi took office in August 2021, just 17 months ago.
The rial is widely assumed to be losing value primarily due to two reasons first, the ongoing protests, which are strangling the economy, and, second, the widespread conclusion that the revival of the Joint Comprehensive Plan of Action (JCPOA) is not going to happen and US sanctions will continue.
A third possible reason is that the regime has run out of dollars to pump onto the foreign exchange market in an effort to curtail the rial’s decline.
According to the Bonbast website, the rial sold for 333,200 rials per US dollar on October 31, a new low, then fell over the next eight days to 367,500 on November 7, just three days after the anniversary of the seizure of the US embassy in 1979. Three years ago on November 4, it took only 114,200 rials to buy a dollar and five years ago it took 40,430 rials to buy a dollar. So, the rial has lost 90 percent of its value in the last five years.
On November 7, the day the rial hit its then all-time worst price of 367,500, the Central Bank ended the right of Iranians to walk into a currency exchange shop and buy foreign currencies. Since then, buyers must go to my.ice.ir and request to buy foreign currency. Only after that website has issued an authorization can a buyer go to a foreign exchange shop and buy dollars.
