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Iran’s rial resisting losses despite new American sanctions

Iran’s rial is trading at normal year-long highs despite new banking sanctions imposed by the US.

Iran’s national currency the rial has resisted losses over the past days despite a new wave of American sanctions targeting the country’s central bank and its sovereign wealth fund.

Rial was holding ground on Saturday, trading at year-long highs of above 115,000 per US dollar, according to currency rate websites and reports from Tehran’s unofficial exchange market.

That came despite an announcement by the US government on Friday which toughened American sanctions on the Central Bank of Iran (CBI), while imposing sanctions on the country’s sovereign wealth fund (NDFI) and a company advancing payments for the government agencies.

The sanctions came after attacks on Saudi Arabia’s oil installation on September 14 which cut the kingdom’s production in half and sent shockwaves across the global markets. Washington has blamed Iran for the attacks, accusations roundly rejected by Iranian authorities.

The rial’s strength comes as the currency suffered massively last summer when the US began to impose its sanctions on Iran.

It traded at historic lows of 190,000 against the dollar in September 2018 before it regained some of its value and rose against foreign currencies a month later.

A series of measures adopted by the Iranian government this year helped control the prices in the unofficial market, allowing the rial to trade at a year-long high of 109,000 against the dollar in July.

That surge this summer came right in the middle of heightened military tensions between Iran and the United States in the Persian Gulf.

Experts cite the relative stability of the price of the rial as a sign of the failure of the American sanctions. They believe Iran has managed to weather the impacts of the sanctions for the time being, allowing the country to further boost economic indicators regardless of growing American economic pressure.

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