Iran’s rial hits record-low of 100,000 to the dollar

Iran's currency hit an all-time low on Sunday of 100,000 rials to the dollar as US sanctions loomed, deepening economic crisis. 

On Sunday, the rial plunged to 112,000 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 has lost half its value against the dollar in just four months, having broken through the 50,000-mark for the first time in March.

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The government attempted to fix the rate at 42,000 in April, and threatened to crackdown on black market traders. 

The central bank blamed “enemies” for the fall of the currency and a rapid rise in the prices of gold coins and the judiciary said 29 people had been arrested on charges that carry the death penalty.

“The recent developments in the foreign exchange and gold markets are largely due to a conspiracy by enemies with the aim of exacerbating economic problems and causing public anxiety,” the central bank said in a statement read on state television, as quoted by Reuters.

Judiciary spokesman Gholamhossein Mohseni Ejei told state television: “29 people have been arrested for economic disruption and will be soon put on trial ... More may be arrested tonight and tomorrow.”

“Many of them face the charge of ‘spreading corruption on earth’,” Ejei said, referring to a capital offence under Iran’s Islamic laws.

Besides the currency fall, the expected return of sanctions has triggered street protests including by bazaar traders usually loyal to the Islamist rulers, and a public outcry over alleged profiteering and corruption.

But the trade continued with Iranians worried about a prolonged economic downturn turning to dollars as a safe way to store their savings, or as an investment in the hope the rial will continue to drop.

With banks often refusing to sell their dollars at the artificially low rate, the government was forced to soften its line in June, allowing more flexibility for certain groups of importers.