Iran’s rial hits new low against dollar as economy reels

Iranian rial currency notes are seen at a market in the holy Shi’ite city of Najaf, Iraq, September 22, 2019. (Reuters)

SULAIMANI (ESTA) — The Iranian rial fell to a new low against the U.S. dollar on Sunday as the economy reels under pressure from the COVID-19 pandemic and U.S. sanctions.

The dollar was selling for as much as 311,500 rials on the unofficial market, up from 304,300 on Saturday, according to the foreign exchange site

The currency has lost about 56% of its value in 2020 as a drop in oil prices has deepened the economic crisis in the country, which also has the highest COVID-19 death toll in the Middle East.

The official exchange rate – used mostly for imports of state-subsidised food and medicine – is 42,000 rials per dollar.

The United States on Thursday slapped fresh sanctions on Iran’s financial sector, targeting 18 banks to further choke off Iranian revenues as Washington ramps up pressure on Tehran weeks ahead of the U.S. election.

Iranian central bank governor Abdolnaser Hemmati dismissed the sanctions as political propaganda and played down their practical impact.

“What needs to be decided in this regard was decided two years ago,” Hemmati was quoted as saying by Iranian media. “Therefore, the banks that were party to the agreement with Iran have decided to continue trading with Iran.”

Analysts said the sanctions may further deter European and other foreign banks from working with Iran, even for permitted humanitarian transactions.

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