Iran's currency plunged to another record low on Sunday, dropping past 100,000 rials to the US dollar, the same day the government inaugurated the new central bank governor in an attempt to combat the month-long economic crisis that has been exacerbated by Washington’s decision to withdraw from the 2015 nuclear deal.
The White House decided to reimpose sanctions against Iran after US President Donald Trump pulled out from the deal on May 8. The sanctions will take effect on August 6.
On Sunday, the rial plunged to 111,500 against the US dollar on the unofficial market, down from about 97,500 rials on Saturday, according to foreign exchange website Bonbast.com. Other websites said the dollar was exchanged between 108,500 and 116,000 rials.
The rial, meanwhile, fell to 112,000 to the dollar on the black market.
These are the highest rates that the dollar has ever recorded against the rial.
The rise in dollar and gold prices coincided with the appointment of Abdolnaser Hemmati as central bank governor instead of Valiollah Seif.
Seif acknowledged during Hemmati’s inauguration that the deterioration of the currency crisis is due to the culmination in several previous problems. Hemmati, for his part, criticized missteps in applying currency policies.
The price of the dollar has risen three fold in Iran in one year.
The rial, meanwhile, has lost half of its value since April due to rampant corruption, the weak economy, financial challenges faced by local banks, high demand for the dollar among Iranians, who fear the looming sanctions, as well as the failure of government policies in luring local and foreign investment.
The United States is set to reimpose its full range of sanctions in two stages on August 6 and November 4, forcing many foreign firms to cut off business with Iran.