![]() ![]() The matter that boosted hopes of increasing the strength of the US economy was Trump’s indications as to his tendency of economic protectionism policy of the American industry and domestic product and his wish to eliminate some trade agreements, which deprive the US Treasury of, tariffs and increase the foreign product competition with the American one, and other similar economic trends. This was reflected directly on the US dollar’s strength globally against other currencies, including the Iranian one. On the other hand, Trump’s victory and his ambitions to strengthen the American domestic economy, optimistic forecasts in regards to the US economy increased. ![]() Such a threat has a very negative impact on the foreign investment in Iran since foreign investors fear the threat of US financial penalties. Moreover, following Trump’s repeated threats to cancel the nuclear deal signed with Iran in mid-2015, has increased pessimistic predictions about the future of the Iranian economy. The recent decline of the Toman exchange rate against the dollar and other foreign currencies can largely be attributed to Donald Trump’s win in the US presidential elections, and his known hostility toward Iran. » Reasons of exchange rate crisis in Iran ![]() This, after it was revolving around 3,500 Tomans in the free market during the past six months. While the rate of the dollar in the free market was close to 4000 Tomans in November, it has already reached 4,000 during December. Then a bigger decline was recorded in a shorter period of time, during the month of November, reaching 3220 Tomans per dollar. This decline continued to at almost constant rates until October, when it recorded 3170 Tomans. According to the government’s exchange rate at the beginning of the year, one dollar was about 3020 Tomans. Since the beginning of 2016, despite the lifting of the international embargo and the resumption of oil exports abroad, the Toman’s situation did not improve. This trend continued and in 2015, the dollar recorded an exchange rate of 2800 Tomans. In 2013, in just one year after the enforcement oil sanctions and an international embargo, the dollar had increased at a rate of 108% and reached about 2,500 Tomans. Since then, the dollar has increased in a very fast pace against the Iranian Toman. Therefore in 2003, the recorded exchange rate was that of 758 Tomans per dollar, compared to the relative stable exchange rate of 143 Tomans which lasted throughout the period of 1992 to 2001, the dollar’s high rise and the Toman’s decrease continued gradually until the dollar reached 1200 Tomans in 2012. All this resulted in a series of crisis which significantly affected the Iranian currency exchange rate against the US dollar and other foreign currencies.Īs the previous graph shows, after 2001, the official exchange rate experienced significant increases which lasted long periods of time. The harshest sanctions to impact Iran was the ban imposed on oil exports, the backbone of the Iranian economy and the almost sole source of its foreign currency. Since 2012, as a direct result of the development of its nuclear program, harsher sanctions were imposed by the West. In the beginning of the second millennium, the sanctions were followed by an international blockade. This was largely because of its tense political relationships with the major powers, in addition to the economic blockade enforced by the United States of America since the nineties. ![]() Since the 1990’s, Iran had passed mutations and numerous changes in its national currency’s exchange. » The Evolution of the Iranian Toman exchange rate against the US dollarīefore we explain the reasons for this steep decline in the Iranian currency now, we need to quickly review the origins of the real crisis, its evolution, and causes of aggravation that brought it to its current state. So, what could have caused this crisis? And what are the economic and social repercussions regarding this change in the Iranian Toman exchange rate against foreign currencies? In the free market, where the difference between that of the government can reach up to 20% and more in some cases, the US dollar is worth 4000 Iranian Tomans. 2016, according to the Iranian central bank, the official declared exchange rate of the USD to the Toman was 3050, it has since reached in Dec. Recently, the Iranian Riyal’s (equals 10 Iranian Tomans) exchange rate has significantly decreased against the U.S. ![]()
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