Iran's currency rial dropped to a new low of 16000 for a U.S. Dollar in trading in Tehran on Tuesday. After wild fluctuations, rial setteled at about 1500 per Dollar. However, the increasing sanctions on Iran, and the targeting of Iran's Central Bank by U.S. and European allies, will most likely bring more instability.
According to the Iranian news site Khabar Online, there was a big rush of buyers for foreign currency in central Tehran where the foreign exchange offices are located. The crowd was so big that police intervention was required to ensure safety and order.
The roller coaster of rial happened while Iran's Central Bank Chief was at a close-door hearing in the Parliament to discuss the issue of falling currency.
It should also be noted that after a complaint by the Central Bank Chief, Khabar Online was banned for few hours and was not accessible. However, the issues were later resolved and the site was back online as of Wednesday morning.
In 1979, 1 rial equaled $0.0141. The value of Iran's currency declined precipitously after the Islamic revolution because of capital flight from the country. In July 1999, 9430 rials amounted to one dollar. However, the value of the rial had become more stable since 1999, as the economy of Iran was growing rapidly and away from the dollar zone.
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