A staff adjusts a board showing the rates of currencies at a currency exchange center in central Tehran, Iran, Oct. 14, 2020. Iran's currency rial has hit a new low against foreign currencies days after the United States slapped fresh sanctions against the Iranian financial sector. On Tuesday, one U.S. dollar was traded at 315,000 rials and one euro was exchanged for 375,000 rials at Tehran's unofficial street market. (Photo by Ahmad Halabisaz/Xinhua)
TEHRAN, Oct. 13 (Xinhua) -- Iran's currency rial has hit a new low against foreign currencies days after the United States slapped fresh sanctions against the Iranian financial sector.
On Tuesday, one U.S. dollar was traded at 315,000 rials and one euro was exchanged for 375,000 rials at Tehran's unofficial street market.
Iran's currency has lost more than 40 percent of its value against the U.S. dollar since the end of June.
Five years ago, when Iran and the world powers signed the Iranian nuclear deal, or the JCPOA, one U.S. dollar was sold at about 35,000 rials in the unofficial market. The dramatic loss in value of the local currency started after the U.S. President Donald Trump pulled Washington out of the JCPOA in May 2018 and imposed financial and trade sanctions on Iran's economy.
For the past several years, however, Iran's official rate for currency, one U.S. dollars for 42,000 rials, has remained unchanged. Iranian government allocates official currency for the imports of basic commodities, including subsidised food and medicine.
The recent volatility in Iran's currency market, beside the hard-hit economy due to novel coronavirus epidemic, comes on the heels of fresh sanctions announced by the U.S. against Iran's 18 banking and financial institutions on Thursday.
U.S. Treasury Secretary Steven Mnuchin said Thursday that the designation of Iranian banks "reflects our commitment to stop illicit access to U.S. dollars."
The U.S. embargoes further curtails access of remaining financial channels of Iran to the outer world for providing foreign currency.
Furthermore, the U.S. government, in a unilateral move, reinstated all UN sanctions on Iran last month despite the UN rejection.
Iran's President Hassan Rouhani has slammed the U.S. government for what he has called U.S. "economic war" against Iran.
Beside the U.S. pressures as a major reason for the plunge in the currency value, economic observers see "holes in the government budget, vanishing forex earnings and the unending demand for hard currency from businesses and people" as other causes behind the devaluation of rial.
The Central Bank of Iran (CBI) announced on Sunday that it would inject 50 million U.S. dollars in hard currency in the forex market every day to try to stabilize rates.
Governor of the CBI, Abdolnaser Hemmati, visited Baghdad on Monday seeking to urge the Iraqi officials to release Iranian assets frozen in the country.
The Monday visit yielded "positive" results as Baghdad agreed to release Iran's frozen assets for the purchase of basic commodities, Hemmati was quoted as saying by Tasnim news agency on Tuesday. Enditem