The Islamic Republic’s currency posted all-time lows on Wednesday, after news broke during market sessions that former U.S. President Donald Trump had been elected to his second four-year term in the White House.
Traders in Tehran said the day's record-low rate of 703,000 rials to the dollar eventually corrected to 696,150 after presumed intervention by the regime’s central bank.
The fragile banknote’s modest gain still reflects its ongoing devaluation, having dropped from 584,000 to the dollar since President Masoud Pezeshkian assumed office in July. This continues the sharp decline from the 32,000-level seen at the time of the 2015 nuclear deal with Western powers.
The persistent downward monetary pressure has resulted in an annual inflation rate in the country exceeding 30 percent.
Speculators likely fear a return to Trump’s "maximum pressure" policy on the nation’s repressive rulers, which could lead to the reversal of sanctions relief granted by the Biden Treasury Department. The former president may also impose stricter restrictions on Tehran's petroleum exports, a crucial source of foreign exchange for the government.
In addition to the possibility of a more hardline approach from a Trump presidency toward the regime, the expected improved relations with Jerusalem could give Israeli officials increased opportunities to target Iran's key economic sectors. These actions could extend beyond the limits set by the Biden administration, particularly in areas like energy infrastructure.
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