Iran’s Currency at Low vs. Dollar

NYTimes.com -- Iran’s currency, the rial, fell to its lowest level ever against the dollar on Wednesday in unofficial foreign exchange transactions in Tehran, Iranian news agencies reported.

The drop appeared to reflect new anxiety about the impact of Western economic sanctions on the country’s Central Bank and worries about the government’s ability to counter it.

The Iran Student News Agency and Mehr News Agency said the unofficial black market rate in Tehran was 18,200 rials to the dollar, compared with 11,000 to 12,000 last month.

Pressure on the rial grew this month after President Obama signed into law a measure to penalize foreign entities that do business with Iran’s Central Bank. The measure, part of a tightening vise of sanctions on Iran over its disputed nuclear program, is intended to dissuade other countries from buying Iran’s oil, which is done through payments to the Central Bank.

There have been recent reports from Tehran that Iranians are seeking to sell their rials and buy dollars or gold to avoid further financial losses, putting additional pressure on the currency.

A weakened rial hurts Iranian importers and consumers, who must spend more rials to buy foreign goods. American officials have said they do not want to hurt Iranians with the sanctions, but the currency’s weakness is a new tactic to persuade Iran to negotiate concerning the nuclear program.

The Mehr News Agency said Mahmoud Bahmani, the director of Iran’s Central Bank, has promised to act forcefully to manage the foreign exchange problem.