A briefcase filled with Iranian rial banknotes is displayed at the currency exchange market on Ferdow West Street in Tehran, Iran, Saturday, January 6, 2018.
Ali Mohammadi | Bloomberg | Getty Images
Iran is facing its worst crisis in years, with a growing economy and a series of unprecedented geopolitical and military blows to its power in the Middle East.
According to Reuters, the Iranian currency rial hit a record low against the U.S. dollar at the end of last week, at 756,000 rials. Since September, the troubled currency has suffered from the knock-on effects of devastating attacks on Iranian proxies, including Lebanese Hezbollah and Palestinian militant group Hamas, and the election of Donald Trump as U.S. president in November.
Tehran has lost its most important ally in the Middle East as Syrian President Bashar al-Assad fell in a sudden offensive by rebel groups. Assad, accused of war crimes against his own people, fled to Russia, leaving behind a deeply divided country.
“Assad’s fall has consequences for the survival of the Islamic Republic,” Behnam ben Taleblu, a senior fellow at the Foundation for Defense of Democracies in Washington, told CNBC. “Don’t let us forget that this regime has spent It took more than a decade of treasure, blood and reputation to save a regime that ultimately collapsed in less than two weeks.”
The currency depreciation has exposed the extent of the difficulties faced by ordinary Iranians, who struggle to afford daily necessities and suffer from high inflation and unemployment amid years of tough Western sanctions and domestic corruption and economic mismanagement.
Trump promised to take a tough stance on Iran and would return to the White House some six years after unilaterally withdrawing the United States from the Iran nuclear deal and reimposing sweeping sanctions on the country.
Iranian President Masoud Pezeshkian said his government is willing to negotiate and revive the deal, formally known as the Joint Comprehensive Plan of Action, which lifts some sanctions on Iran in exchange for restrictions on its nuclear program . But the International Atomic Energy Agency says Tehran is enriching uranium at record levels, reaching a purity of 60 percent, which is only a small technological step away from weapons-grade purity of 90 percent.
