On April 11, the Iranian government set the exchange rate of US dollar at 42,000 rials against the dollar causing currency exchange stores to shut down in the country’s capital, Tehran. These shop owners are unhappy with the standard rate and have shut down shops, forcing Iranians to resort to the black market for buying dollars for 50 percent higher cost. Economists feel that it is going to be challenging to maintain the standard rate because the black market is hoarding dollars, making the price to skyrocket.
A young man from Iran said that his brother went to study in the United States a few months ago. They recently sent him money in dollars for his living expenses. They bought $300 at an exchange rate of 35,000 rials against a dollar a day before the government announced the standard currency rate. But with the currency shops shut, the black market is selling a dollar at the price of 58,000 rials.
He said that they won’t be able to send any money because they’ll have to pay double the amount now. He said that he voted for Hassan Rohani to become the president during 2017 elections because he thought Rohani will improve the economy. But in the last three months, he found that the administration wasn’t strong enough to bring out policies that would do any good to the country’s economy.
Steve Hanke, economics professor, Johns Hopkins University, Baltimore, the United States, said that the economic storm in Iran is because of residual international sanctions and economic mismanagement. It started when Iran was unable to gain profit from the nuclear deal it signed with world leaders in 2015. He believes that the economic troubles have severely affected Iran’s trade relations, foreign investments, and finances. If the economy cripples further, Donald Trump might cancel the nuclear deal, which will be a serious harm to the country.