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Iranian Currency Takes Nose Dive; Another Country in Turmoil

By S.C. Stringfellow | Update Date: Oct 04, 2012 08:58 AM EDT

No country is an island. In this global economy, a stone tossed in a British pond causes ripples in Greece and Mexico. We are all locked in markets in which our goods and services regulate the strength of our respective currencies versus another countries currency.

Here is one way to make sure that your country's currency falls like dominoes on the world's markets: First, make sure your country is close enough to the middle east to affect regional politics; next, elect a leader who goes out of his way to not work and play well with others; then, work your way towards obtaining the keys to mass destruction at the same time as you threaten your neighbors - igniting fears that you may start the Armageddon prophesied in the Bible.

In an effort to contain this country, world leaders have had to take certain measures to change this course. The result, the rial, the unit of currency in Iran, has fallen to a new low at 37,000 to the dollar Tuesday, down from 26,900 just five days ago new low.

At a press conference on Tuesday, Iranian President Mahmoud Ahmadinejad said the quickly eroding strength of the rial was part of a "psychological war" the United States and others were waging against Iran to pressure the country to cease work on an alleged nuclear weapons program.

Ahmadinejad said, "the enemy has thrown a rock on our path. Everyone needs to help throw the rock back to the enemy."

The sliding price of the rial has led to mass demonstrations in Tehran and many shops remain closed and boarded up against rioters. The state police are patrolling currency exchange houses on Ferdowsi and Manouchehri Streets, near one of the main areas for currency traders in the capital. Very few small exchange houses opened today.

The rial fell to a record low of 35,000 to the dollar on Oct. 1, an 18 percent drop, on the unofficial market. Yesterday the currency was valued at 36,100, according to the state-run Mehr news agency, though traders said they were no longer exchanging rial for foreign currency. The currency has plummeted since November when it traded at 13,200 to the dollar.

Due to pressure and sanctions imposed by the U.S and the E.U, Iran's economy has taken some hits over the past year. The restrictions, aimed at curbing Iran's nuclear program, have limited the country's ability to sell oil, its biggest export, and other goods in return for currencies such as dollars and euros.

Riot police were deployed yesterday in the city's merchant bazaar after shopkeepers refused to open and trash cans were set alight in the streets.

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