The Middle East Policy Council posted a new bulletin on Iran today, which I co-authored. It focuses on the country’s troubled economy and its oil export outlook. Feel free to comment here on the article. Here’s an excerpt:
Earlier this month, the Iranian rial closed at a record low of 22,300 per dollar at currency trading houses on Tehran’s Ferdowsi Street, having lost 9 percent of its value in one short week. Currency traders reported that demand for dollars tripled in early August. Over the past year, the rial has lost more than 50 percent of its value, as sanctions constrain Iran’s economy, and average Iranians flee the currency because they fear it will soon be worthless. July inflation reached 23 percent according to the Central Bank of Iran.
Some blamed the rial’s recent plunge on Central Bank Governor Mahmoud Bahmani, who first announced that the official exchange rate of 12,260 to the dollar would be realigned to reflect the currency’s declining street value. He backed away from the plan on August 9, however, and has yet to make clear what measures might be taken next—if any. Iran’s economic woes were unavoidable for both authorities and the public during the holy month of Ramadan.