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Iranian currency plunges to record low after western sanctions

Najmeh Bozorgmehr
Financial Times [1]
Wednesday, December 21, 2011

Iran’s currency has plunged almost 10 per cent to a record low against the US dollar in recent days amid concerns over the impact of international sanctions and speculation the government is devaluing the rial to help narrow a massive budget deficit.

One US dollar bought 15,300 rials on the open market on Wednesday, from 13,800 on Saturday. The Iranian currency is down 30 per cent against the dollar this year.

But the 9.8 per cent decline in just a few days is fuelling fresh anxiety, not only among ordinary Iranians worried about the sharp fall in the value of their rial-based savings but also among businessmen who say the currency volatility has made their lives difficult.

Over the past decade, Iran’s Central Bank, which channels more than 90 per cent of hard currency into the local market, has employed a managed float system to support a single rate against hard currencies, notably the US dollar.

Full story here. [1]