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Iranian Currency Reaches New Lows After Terror Attack

Various currency rates are displayed at a currency exchange business in downtown Tehran, Iran, Wednesday, Sept. 5, 2018

Iranian national currency’s downfall has once again gained momentum, while prices of gold and gold coins has also dramatically soared.

Based on the latest reports, one dollar has hit the record breaking figure of 150,000 rials.

Local websites reporting exclusively on forex and gold say that dollar’s value has passed the record-breaking point of more than 150,000 rials in open markets across Iran. In the meantime, one euro was exchanged for 176,060 and one Sterling pound for 195,840 rials.

Furthermore, a board member of Iranian Gold and Jewelry Union says that despite a long holiday recently the value of foreign currencies soared and led to a significant increase in the price of gold and coins.

Without further elaboration, Mohammad Kashtiarai insisted that rial’s downfall as well as gold and coins’ price hike are related to “political developments”.

However, some of the websites say that the recent deadly attack on the Iranian Armed Forces military parade in southwestern city of Ahvaz, are the main reasons behind rial’s depreciation on September 23.

But there are several fundamental reasons why the rial keeps losing value. Inconclusive talks between Tehran and EU for keeping Iran’s nuclear deal alive, the imminent special session of the United Nation’s Security Council chaired by President Donald Trump, the unknown fate of the bills related to money laundering and financing international terrorism in the Iranian parliament and the unprecedented drop in Iranian oil exports are the main culprits.

Since the beginning of the Iranian fiscal year in March, the value of the rial has depreciated three-fold, from 50,000 to the dollar to 150,000.

Most analysts have tied rial’s downfall to the mounting tensions between US-Iran, particularly after Washington’s withdrawal from JCPOA.

Although the Iranian government has eased foreign currency rules and has allowed licensed exchange offices and other persons to bring foreign banknotes and gold into the country, the rial’s value has continued to drop.

Iran's first vice-president Es'haq Jahangiri admitted on September 11 that U.S. sanctions against Iran have been "highly effective."

Jahangiri also said that Iran is experiencing "a difficult and sensitive situation," but it has not reached a "deadlock" yet.

Emphasizing that the sanctions have been highly effective, Jahangiri added, "The U.S. has declared an economic war on us. Meanwhile they are waging a political and media war to influence public opinion in Iran."

In a surprising admission for an Iranian leader, even President Hassan Rouhani blamed his country’s currency woes on Donald Trump, during a recent parliamentary session.

Somewhat ironically, this is perhaps the only issue on which Trump and Rouhani can find themselves in agreement. Trump has been more than happy to take full credit for the economic chaos in Iran, implying that his sanctions have left the Islamic Republic with little breathing space.