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Iranian currency plunges to record low against the dollar

October 1, 2012 |  9:48 am

Rial

TEHRAN -- The Iranian currency plunged to a record low Monday, plummeting to a street value of 32,500 rial to the dollar, according to exchange tracking websites.

The dramatic numbers were censored and disappeared from websites minutes after they were posted Monday. Yet the news was also relayed through the semi-official Mehr News Agency, which reported the rial was trading at an only slightly better rate of 32,300 to the dollar.

The newest numbers revealed a stunning drop in just a few days: The rial had been selling for 26,900 per dollar on the Tehran black market as of Thursday. But the trend is nothing new. Over the past nine months, the rial has tumbled more than 70% in value, driving up inflation and making food more costly.

The plunge is another sign of the economic unease in Iran as it grapples with economic sanctions that have tightened in the past year. Western powers, unconvinced by Iranian insistence that its nuclear program is solely for peaceful purposes, have ratcheted up pressure to try to curb its uranium enrichment efforts.

The unease has apparently spurred Iranians to buy up dollars and other foreign currency. Though the Iranian central bank sets an official trading rate of 12,260 rials to the dollar, the street value of the rial is far lower.

As Iranians continued to be pinched financially, the economic strain could have political repercussions. A recent Israeli Foreign Ministry report, reported by Haaretz, found Iranians blamed their government for the surging cost of bread, meat and electricity caused by Western sanctions.

“As long as there is no reconciliation with the U.S. administration and sanctions prevail, the devaluation of the rial will continue,”  said Asghar, a 40-year-old who owns a currency exchange shop south of the British Embassy in Tehran.  

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-- Ramin Mostaghim in Tehran and Emily Alpert in Los Angeles

Photo: An Iranian woman displays a new 50,000 rial banknote released by the Central Bank of Iran in Tehran on March 12, 2007. Credit: Hasan Sarbakhshian / Associated Press

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