Iran’s rial hits new low against dollar as economy reels

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A man counts Iranian rials at a currency exchange shop, before the start of the U.S. sanctions on Tehran, in Basra

DUBAI (Reuters) – The Iranian rial fell to a new low against the U.S. dollar on Saturday as the economy reels under the COVID-19 pandemic and U.S. sanctions.

The dollar was selling for as much as 263,500 rials on the unofficial market, up from 257,000 on Friday, according to foreign exchange site Bonbast.com. The economic daily Donya-e-Eqtesad’s website gave the dollar rate as 260,800, up 5,100 rials from Friday.

The currency has lost about 49% of its value in 2020 as a drop in oil prices has deepened the economic crisis in the country, which also has the highest COVID-19 death toll in the Middle East.

In mid-July, the U.S. dollar rose to around 255,000 rials but the rial then recouped some of its losses to trade at around 220,000 in August.

The official exchange rate – used mostly for imports of state-subsidised food and medicine – is 42,000 rials per dollar.

On Friday, Iranian central bank governor Abdolnaser Hemmati said in an Instagram post that the economy was “under the most severe pressures”, and “many factors are beyond (our) control”.

In May 2018, President Donald Trump withdrew the United States from a multilateral deal aimed at curbing Iran’s nuclear programme and reimposed sanctions.

(Reporting by Dubai newsroom; Editing by Pravin Char)

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