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Dollar Hits A New High On Iran's Black Market

An Iranian man holds U.S. 100-dollar bills at a currency exchange office in a shopping centrer in the capital Tehran, April 10, 2018

Based on the latest reports from Tehran, the value of each U.S. dollar climbed to 80,000 Iranian rials on Saturday, the first day of the week in Iran.

The Iranian currency has lost almost one third of its value in the last two months and the dollar has climbed from around 40,000 rials a year ago to double that amount.

The Iranian government has banned trading in foreign currencies since April, creating hardship for those who want to travel abroad or import goods, but trading goes on in the back alleys and even online.

Social media and unofficial reports say that on Saturday morning the dollar was being exchanged for 76,000 rials, but in a matter of hours it climbed to 80,000. Some reports say that at the end of the day, the rate settled at 78,000.

Part of the reason for rial's loss of value is the uncertainty emanating from President Donald Trump's tough stance toward the Iran nuclear deal, or JCPOA. On May 8, Trump pulled out of the agreement, triggering impending sanctions on Iran

But there are also economic reasons, related to fundamental and structural problems of Iran's economic system.

Critics say that mismanagement, corruption and lack of transparency have plagues the economy for decades and U.S. sanctions have compounded unemployment and inflation.