Iran rial plunges to new lows amid unrest, international isolation

Men look at currency exchange rates at an exchange shop in Tehran on February 21, 2023. (Photo courtesy: AFP)
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Updated 26 February 2023
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Iran rial plunges to new lows amid unrest, international isolation

  • Iran’s rial has lost nearly half of its value since the start of nationwide protests last year
  • Iranians have been turning to dollars, other hard currencies or gold to protect savings

DUBAI: Iran’s currency fell to a record low against the US dollar on the unofficial market on Sunday, amid the country’s increasing isolation over its disputed nuclear program, human rights violations and the supply of drones to Russia.

The US dollar was fetching as much as 601,500 rials on Iran’s unofficial market on Sunday, compared with 575,000 on the previous day and 540,000 on Friday, according to foreign exchange site Bonbast.com.

Iranian authorities have blamed the currency’s fall on “the enemies’ plot” to destabilize the Islamic Republic after months of unrest sparked by the death in custody of a young woman on Sept. 16.

The rial has lost nearly half of its value since the start of nationwide protests, the boldest challenge to theocratic rule since the 1979 Islamic Revolution.

With protests in the Sunni-populated areas of Iran persisting, demonstrations in other parts of the country have waned in the past few weeks amid the state’s harsh crackdown on protests.

The clerical leaders fear economic misery could ignite more protests when Iran faces mounting Western pressure over issues ranging from “brutal” clampdown on unrest, its disputed nuclear program and the war in Ukraine, where Western states say Russia has used Iranian drones.

Iran denies supplying drones to Russia for use in the Ukraine war.

The decreasing likelihood of salvaging Tehran’s 2015 nuclear pact with world powers amid stalled talks since last year could also mean that crippling economic sanctions re-imposed by Washington when it ditched the pact in 2018 will continue to weigh on Iran’s economy.

Faced with the prospect of further economic hardship, Iranians have been turning to dollars and other hard currencies or gold to protect their savings amid an inflation above 53% and rising prices.

To calm the market and ease demand for dollars, the central bank on Saturday lifted a ban on private exchange shops selling hard currencies.


Aid flow into Gaza falls short of ceasefire terms

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Aid flow into Gaza falls short of ceasefire terms

  • Israel says average of 459 trucks a day have entered Gaza, compared to the 600 promised under the ceasefire
  • UN reports far fewer - just 113 trucks a day since Oct. 12
JERUSALEM: Aid deliveries into Gaza are falling far short of the amount called for under the US-brokered ceasefire, according to an Associated Press analysis of the Israeli military’s figures.
Under the October ceasefire deal between Israel and Hamas, Israel agreed to allow 600 trucks of aid into Gaza each day. But an average of only 459 trucks a day have entered Gaza between Oct. 12, when flow of the aid restarted, and Dec. 7, according to an AP analysis of figures by COGAT, the Israeli military body in charge of coordinating aid entry.

Aid has fallen short

COGAT said that roughly 18,000 trucks of food aid had entered Gaza between the ceasefire taking effect and Sunday. It said that figure amounted to 70 percent of all aid that had entered the territory since the truce.
That means COGAT estimates that a total of just over 25,700 trucks of aid have entered Gaza — well under the 33,600 trucks that should have entered by Sunday, under the terms of the ceasefire.
Throughout the conflict, the UN and aid groups have said the amount of aid entering Gaza is far lower than COGAT claims.
The UN says only 6,545 trucks have been offloaded at Gaza crossings between the ceasefire and Dec. 7, amounting to about 113 trucks a day. That’s according to its online database. The UN figures do not include aid trucks sent bilaterally by organizations not working through the UN network.
A Hamas document on Saturday provided to the AP put the amount of aid trucks that have entered at 7,333.
This week, United Nations Office for the Coordination of Humanitarian Affairs stressed a “dire” need for more aid to enter Gaza, saying Israeli restrictions on aid have bottlenecked recovery efforts.

Food remains scarce

Humanitarian groups say lack of aid has had harsh effects on many of Gaza’s 2 million residents, most of whom were forcibly displaced by war. Food remains scarce as the Palestinian territory struggles to bounce back from famine, which hit parts of Gaza during the war. Starving mothers in Gaza are giving birth to malnourished babies, some of whom have died in hospital, according to a recent report by UNICEF. As winter rains pick up, displaced families living in tents have been left exposed to the elements and without supplies to cope with floods and the biting cold.
“Needs far outpace the humanitarian community’s ability to respond, given persistent impediments,” the agency wrote in a report on Monday. “These obstacles include insecurity, customs clearance challenges, delays and denials of cargo at the crossings, and limited routes available for transporting humanitarian supplies within Gaza.”
Israel temporarily stopped all aid entry at least once in response to alleged Hamas violations of the truce. Israel said that Hamas has failed to return the bodies of the hostages in the time period established by the ceasefire, while Hamas has said it struggled to find the bodies due to the destruction left by Israel in the Palestinian territory.
Hamas has also accused Israel of violating the ceasefire terms because of the slow flow of aid, continued closure of the Rafah crossing and ongoing deadly strikes on Gaza.

Remains of final hostage

Meanwhile, Israel says it is demanding the return of the final hostage, Ran Gvili.
The Office of Prime Minister Benjamin Netanyahu told the AP on Wednesday that Gvili’s remains must be returned, a condition of the first phase of the ceasefire.
“Once phase one is completed, phase two will begin,” the office said in a statement.
Hamas militants and Red Cross crews continued to comb the ruins of Gaza City for the final body this week, while the militant group Islamic Jihad claimed it had handed over the last hostage body in its possession.
On Tuesday, Hamas called for more international pressure on Israel to open key border crossings, cease deadly strikes on the territory and allow more aid into the strip.
The accusations mark the latest road bump at what regional leaders have described as a critical time for the ceasefire agreement, as mediators seek to push the truce into its second, more complicated phase.