On February 9, the Iranian rial hit a historic low as the US dollar reached IRR 925,800. This depreciation is attributed to renewed pressures from the US, alongside negative market sentiment following key speeches from Iranian leadership. Traders are increasingly converting their rials into foreign currency, signaling distress in the national economy. Anticipated interventions by the Central Bank may help stabilize the currency but confidence remains shaky.
On February 9, Tehran’s money market experienced heightened volatility as the US dollar surged to IRR 925,800, marking a historic low for the Iranian rial. Despite the cold weather leading to official market closures, street traders were active in Ferdowsi Square, buying and selling currencies, while official Bureaux de Change opted not to sell amid fears of further depreciation due to President Trump’s renewed pressure on Iran.
The currency market reflected this trend, with the euro hitting IRR 945,400 and the British pound at IRR 1,134,800. As the rial weakened, traders sought refuge in more stable currencies like the UAE dirham, which traded at IRR 252,600. The negative market sentiment intensified following news of Trump’s memorandum against Iran and Ayatollah Khamenei’s rejection of US negotiations.
Traders on Ferdowsi Street expressed a disinterest in holding the rial, with many quickly converting their assets into foreign currency, illustrating a lack of confidence in the national currency. A veteran trader remarked that “the national currency has lost its appeal entirely,” suggesting that any new acquisition of rials is often converted quickly into other assets.
Domestic tax policies have exacerbated the situation, leading to reluctance in rial-based transactions and further weakening the currency. Observers note that this has created a self-reinforcing cycle of depreciation, compounding the currency’s struggles against external pressures.
The Central Bank of Iran (CBI) is reportedly intervening in the market, though there are mixed opinions on its effectiveness. Some traders think current price levels may correct by IRR 30,000 amidst warnings of traps for inexperienced buyers at peak prices. Conversely, others argue traditional market analysis methods may no longer apply due to growing wealth disparities among traders.
Forecasts suggest the CBI could significantly intervene in the market on February 10, particularly by injecting UAE dirhams to stabilize the currency environment. The dirham has become essential for trade settlements and its exchange rate is closely watched as an indicator of Iran’s currency stability owing to ongoing sanctions.
Iran has been grappling with a depreciating currency, exacerbated by US sanctions and internal economic policy challenges. President Trump’s administration reignited a campaign of pressure on Iran, contributing to negative perceptions in the money market. As Iran seeks to negotiate, fluctuating currency values have undermined economic stability, impacting individual traders and the broader economy. This has led to a complex interplay between local market dynamics and international economic pressures, notably those linked to the US dollar and the UAE dirham.
The Iranian rial continues to face severe challenges, hitting historic lows due to a combination of international pressures and local economic policies. Traders are increasingly avoiding the rial, opting instead for foreign currencies amid rising volatility. The Central Bank of Iran’s interventions may provide some respite, but the overall confidence in the rial remains low, complicating efforts for economic stability.
Original Source: intellinews.com
