The value of Iran's currency fell 10 percent Monday following President Obama signing new sanctions against Iran's central bank Saturday. Europe is also considering a ban on Iranian oil.
For years Iran has derided the impact of international sanctions on its economy, but that swagger is showing signs of becoming more of a panic as the country’s currency continues its slide in the wake of new US sanctions targeting the Iranian central bank.
Iran’s currency, the rial, took about a 10 percent hit Monday following President Obama’s signing Saturday of a new round of Iran sanctions that, among other things, impose stiff penalties on foreign financial institutions that have dealings with Iran’s central bank.
In all, the rial has lost more than a third of its value since September and stood after Monday trading at about 17,000 rials to the US dollar, a record low.
As recently as Sunday representatives of the central bank were scoffing at the new American measures, saying they would make the US the brunt of jokes the world over as Iran’s oil clients continued their trade with Iran. The bulk of transactions for Iranian oil pass through the country’s central bank.
But by Monday the bank held an emergency meeting to deal with the tumbling rial, the Iranian Mehr news agency reported.
The US and other Western powers are hoping that a deepening bite from economic sanctions will persuade the Iranian government to curtail its nuclear program, which international nuclear specialists believe is aimed at delivering a nuclear weapon. Iranian officials insist that the program is designed solely for civilian-energy uses.
The US and the European Union, which has joined the US in imposing a series of new sanctions since last spring, want Iran to return to a negotiating table that has sat idle since an unproductive meeting in December 2010. Iranian officials signaled last week that they might be interested in resuming talks.