Iran's Currency Collapses, Naira Exchange Rate Now Bigger
- The Iranian rial has collapsed and is trading at one if its lowest level in the exchange market
- The fall follows a protest by merchants, students, and workers in Tehran and other cities, demanding economic relief
- Years of sanctions, poor management, and limited access to foreign currency have fueled the currency’s free fall
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Iran’s national currency has crashed to record lows, with the rial weakening so sharply against major currencies that, on the official foreign exchange sheet, one rial is effectively valued at 0 euros.
Also, the Nigerian naira is now trading at N1 to the Iranian rial on Monday, January 12, the highest level ever.
What this indicates is that with N2 million, a Nigerian can be a billionaire in Iran.
Source: Getty Images
On unofficial markets, EconomicTimes reports the Iranian rial is trading at more than 1.4 million to the US dollar, a record low that reflects plummeting confidence in the economy, soaring inflation and sustained pressure from international sanctions.
Officials and private economists say the real value of the rial has shrunk to near‑zero against hard currencies like the euro and dollar, even as other emerging market currencies such as Nigeria’s naira remain far stronger in comparison to the rial’s collapse.
Iran’s annual inflation rate has also hit 42.2% in December, with food prices rising by roughly 72% year‑on‑year, according to official and private sector estimates.
Iran protest
The sharp rise in prices has eroded household incomes and savings, contributing to widespread public discontent.
The iranian currency’s fall has been driven by a complex mix of long‑standing Western sanctions, poor economic management, reduced oil exports and a lack of access to global financial markets.
Unofficial exchange rates for the rial have more than doubled over the past year, while the central bank of the country has struggled to defend the currency.
Protests erupted in late December after merchants in Tehran’s Grand Bazaar shut their shops and took to the streets to denounce rising costs and the burden of an exchange rate they say has made business impossible.
The unrest has spread to universities and other cities, with demonstrators expanding their demands to include broader political grievances against the Islamic Republic’s leadership.
Security forces have responded with force in places, and rights groups report dozens of deaths and thousands of arrests, though Iranian authorities have neither confirmed nor denied casualty figures.
Tehran has also restricted internet access in some regions in an apparent attempt to curb the spread of protest footage.
Source: Getty Images
The currency crisis has also forced leadership changes: the central bank governor resigned late last month as the rial hit record lows, and the government has shuffled economic officials in an effort to restore confidence.
Economists warn that without significant political and economic reform, the rial’s collapse will continue to exact a heavy toll on ordinary Iranians, many of whom are already struggling to afford basic necessities.
Naira exchange rate against US dollar
Legit.ng earlier reported that the gap between Nigeria’s official and parallel market exchange rates widened further last week as tight dollar supplies in the informal market pushed the naira in opposite directions across FX windows.
While the naira posted a modest gain at the official market, pressure intensified in the parallel market, where scarcity of foreign exchange drove the dollar higher and expanded the spread between both rates.
At the official window, the naira appreciated week on week, supported by inflows from foreign portfolio investors and increased supply from local market participants.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
