Iran’s currency plunged to record lows on March 2, posing a new challenge for the country’s leadership. The Iranian rial, which has lost a fifth of its value since last week, hit a low of 601,500 per dollar on Sunday. The sharp devaluation of the currency has led to a sharp increase in the import price of important goods, reducing the purchasing power of ordinary Iranians.
Iranians are scrambling to buy dollars amid fears that tough U.S. sanctions could continue as talks to restart the nuclear deal collapse. Analysts say the rising cost of living could spark new turmoil. And reassuring markets and easing demand for dollars has proven challenging for the Iranian government.
Due to sanctions, the Iranian government has limited foreign exchange reserves to intervene in currency markets. Some traders have described recent market frenzy as sellers have dumped the rial in recent days, outweighing government moves to support the currency.
