Iranian Currency broke 7000 toman for 1 US Dollar

[TheImmortal]

How can Iran stem this currency crisis? Will toman reach 10,000 to 1 US Dollar?

This presents a lot of challenges to Iran’s society because it affects the entire social economic ladder (low class, middle class, upper middle class, upper class, and rich elite).

 

[Valar.]

As far as I know, the official currency of Iran is Rial.

Toman is just an unofficial name for 10 Rials.

In other words, according to the OP, 1 USD = 70,000 IRR (Iranian Rial).

 

[Talwar e Pakistan]

I feel bad for those who invested in Iranian currency

 

[Sugarcane]

@Oracle Are you still holding IRR?

 

[Ajaxpaul]

Is this because of inflation ?

 

[The SC]

From an economic point of view this might have positive results for the Iranian economy, since Iranians will not be able to buy foreign goods and thus will be mostly buying domestic products.. which will stimulate the economy a bit..

 

[Imran Khan]

why not they just print new currency ?

 

[Sugarcane]

Is this because of inflation ?

Donald Duck

 

[Śakra]

Looks like the beginning of a hyperinflation cycle for the irani economy. The same thing happened to Venezuela.

 

[somebozo]

From an economic point of view this might have positive results for the Iranian economy, since Iranians will not be able to buy foreign goods and thus will be mostly buying domestic products.. which will stimulate the economy a bit..

Your logic is like...
If you cut your hands off you will have a positive impact on your body as it may stop masturbation...

 

[Chinese-Dragon]

Is this because of inflation ?

Partially. There is a lack of confidence/demand in the Rial due to economic and political uncertainties (of which high inflation is a huge factor).

If the Rial is falling, what it basically means is that people are selling Rials and buying foreign currencies (dollar/euro/etc.) So there is a low demand for Rials and a high demand for foreign currencies.

The Iranian government can shore up the exchange rate by buying Rials and selling foreign currency denominated assets. But that is expensive and it will drain the foreign currency reserves quickly.

They can also raise interest rates to attract investment in Iran (which will increase demand for Rials) but that will negatively impact economic growth. Also, foreign investors are being scared away by the risk of sanctions.

 

[AZADPAKISTAN2009]

Iran does not buys stuff from outside so they currency fluctuation does not matters

They buy anything they want locally with iranian currency

 

[The SC]

Your logic is like...
If you cut your hands off you will have a positive impact on your body as it may stop masturbation...

Not really.. that is some positive in the midst of the economic negatives..

 

[TheImmortal]

Not really.. that is some positive in the midst of the economic negatives..

Some currency devaluation can be beneficial for domestic products and exports and negative for imports.

But runaway currency devaluation leads to negative consequences like capital flight and further panic on the supply/demand of the currency.

 

[The SC]

Some currency devaluation can be beneficial for domestic products and exports and negative for imports.

But runaway currency devaluation leads to negative consequences like capital flight and further panic on the supply/demand of the currency.

True, but people still have to buy basic necessities..