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Iran's Currency Falls Again After Watchdog Decision To Strengthen Penalties

A man counts his banknotes and bank checks in Tehran, August 21, 2019. File photo

Iran’s currency rial continued to lose value against major currencies on Saturday, reaching as low as 154,000 to the U.S. dollar at one point.

The main reason for rial's fall was the decision of an international financial watchdog to call on all countries for countermeasures against Iran for not ratifying legislation against money laundering and financing of terrorism.

The Financial Action Task Force (FATF) a Paris-based inter-governmental watchdog on Friday decided Iran had enough time since 2017 to accede to United Nations and other conventions and regulation for transparency and in its banking and financial systems.

Just two months ago, the rial was trading at 130,000 and two years ago at 40,000 against the U.S. dollars. Washington’s sanctions weakened the currency and now FATF’s decision pushed it down further.

The chief of Iran’s Central Bank on Friday assured the public in a statement that FATF’s decision will not impact the rial.

Iran’s economy is in the grips of a deep recession, with internal political instability and lately an outbreak of coronavirus infections sapping the public’s confidence.

The price of gold also rose on Saturday in Iran and the representative of gold traders in Tehran blamed the FATF decision for both the currency decline and the rising price of the precious metal.