Rising tensions in the Middle East have caused the Iranian currency, the rial (IRR), to fall to a new low against the dollar in the unofficial market, according to CNBC. The exchange rate reached 705,000 rials to one dollar, the report said, citing data from the website Bonbast, which tracks the foreign exchange market.
The exchange rate set by the mullahs' regime, on the other hand, is 42,000 rials per dollar, that is, only a fraction of what those who wish to exchange actually have to pay. The value of 42,000 rials has been in effect since 2018, regardless of all of Iran's economic problems.
According to the report, the drop in the value of the rial is not only related to the recent rocket and drone attacks against Israel.
Iran suffers trade restrictions and high inflation
The Iranian attack is Iran's first direct attack against Israel from Iranian territory. Iran is therefore at risk of further trade restrictions. This is likely to further weaken the country's economy.
Iran has long been under enormous pressure from US sanctions since the time of Donald Trump.
Currency devaluation example: According to Statista, Iranian inflation was a good 47 percent in 2023. Sanctions are affecting sales of some of Tehran's key exports, such as crude oil and petroleum products. The Iranian state simply lacks income from the sale of raw materials.
Iranian economic output is a fraction of Germany's
In 2023, the Iranian economy produced goods and services worth $366.44 billion (almost €340 billion). German GDP was 4,121 million euros in 2023, almost six times more.
Iran's most important exports include energy, carpets and agricultural products such as pistachios and saffron. There are also metals and minerals, as well as car parts.
In the Iranian economy, the service sector has the largest number of employees: about 45 percent of all jobs are located here. This is also explained by the fact that the State has an inflated administrative apparatus. About 30 percent of jobs are in agriculture and the remaining 25 percent in industry.