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Iranian Currency Hits A New Low As Trump Announcement Looms

Iranians stand in front of a bank, hoping to buy U.S. dollars at the new official exchange rate announced by the government, in downtown Tehran, April 10, 2018

Despite government edicts and police pressure foreign currencies keep rising in Iran, as desperate travelers and others try to find U.S. dollars or euros on the black market.

On Saturday, one US dollar was trading for 63,000 rials, approaching double of what it was a year ago. The euro has reached 75,000 rials, sold by by street dealers who face arrest since the government announced an official rate of 42,000 rials for the dollar in mid-April.

In a desperate move President Hassan Rouhani's administration decided to set a unified rate and try to strictly monitor the market to prevent speculation. But only a handful of people can get dollars at the lower government rate and only at a limited number of banks.

As a result, people look for dollars or euros from anyone willing to sell and the exchange rate soars.

Iran's Labor News Agency, ILNA quotes local analysts as saying that the main reason for the falling rial is the anxious mood before May 12, when President Donald Trump is set to announce his position on the Iran nuclear deal.

If Trump decides to abandon the agreement, chances of new economic sanctions and more isolation for Iran will seriously impact the country's economy. There have reports in recent months of huge capital flights, which might have put a serious strain on Iran's foreign currency reserves available inside the country.

A host of Iranian officials, headed by the Supreme Leader Ali Khamenei have blamed the currency crisis on "foreign enemies"; mainly Saudi Arabia and have even named Dubai as a place from where the Iranian currency is being undermined. But Radio Farda's correspondent in Dubai says that there is almost no trading of Iranian currency in the Emirates vibrant foreign currency market.