By Saeid Jafari for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
Fluctuation in the value of the rial became a common occurrence in Iran during the presidency of Mahmoud Ahmadinejad, and especially in its latter years. Foreign currencies would get more expensive by the day — and sometimes even by the hour.
When Ahmadinejad first took office in 2005, the dollar traded for 8,200 Iranian rials. In the days before the election of President Hassan Rouhani in June 2013, the greenback cost some 36,000 rials — four times as much.
n contrast, once Rouhani took office, fluctuations in the rial’s value not only became a rarity but the Iranian currency became stronger. For instance, in January 2014, the greenback traded for some 29,000 rials on the open market. However, in the past month, the rial has suddenly been weakening. The dollar rate had stayed around 35,000 rials for an extended period, but in November, things started to change.
After the election of Donald Trump as president of the United States, Iran was also affected by the subsequent tense political atmosphere around the world. Demand for the dollar in Iran had increased from the day before the US election, and when Trump’s victory was announced, the price of the greenback jumped to 37,000 rials on the open market.
In the last week of November, it even reached 40,000 rials. This sudden spike in the exchange rate resulted in an effective halt in currency trading on the open market, with many exchange offices removing the greenback from their lists of available currencies. Though some experts believe that the jump is merely a short-term bubble, others think that the rial needs to weaken to reflect its true value.