Why is Iran’s currency nosediving?

From late July of last year Iran’s currency, the rial, has lost 40 percent of its value against the United States dollar. This is considered a national catastrophe by many analysts.

What is the reason and roots of this significant crisis?

We are hearing a variety of answers these days, including:

  • Unknown fate of the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA)
  • S. President Donald Trump appointing former U.S. Ambassador to the U.N. John Bolton as his new National Security Advisor after sacking General H.R. McMaster
  • Deliberate increasing of the U.S. dollar value by the government of Iranian President Hassan Rouhani to provide for a portion of the regime’s budget deficit
  • Banks going bankrupt as people are losing their trust

All these are correct. A closer look, however, leads us to this conclusion that these developments have formulated during the past two years. All the while, the rial’s nosedive began immediately after the mullahs’ regime took the reigns of power in 1979.

1980 – U.S. dollar = 100 rials

1986 – U.S. dollar = 610 rials

1995 – U.S. dollar = 2630 rials

November 2011 – U.S. dollar = 10,600 rials

February 2012 – U.S. dollar = 26,050 rials

Conclusion: The events of the past two years cannot be the root cause of the rial’s nosedive.

Iran’s corrupt infrastructure and economic foundations are the main origin of this epidemy. A country’s economic structure is based on a specific infrastructure.

For example:

Germany – Heavy industry

Turkey – Tourism and industry (in 2005 Turkey was listed as among the world’s 20 industrial countries)

Japan – Electronics and auto manufacturing

South Korea – Auto manufacturing and …

What is the Iranian regime’s economy founded upon?

Industry? Tourism? Auto manufacturing? Agriculture? …

None of the above. The Iranian regime’s economic foundation is extremely corrupt, heavily based on massive smuggling and large-scale imports. This is blocking “all paths for any efforts to heal Iran’s economy,” according to Radio France Internationale.

One side-effect of an ill-founded economic infrastructure resembles in the price of a country’s currency against the U.S. dollar. For the past 39 years of the mullahs’ rule in Iran, we are continuously witnessing the rial nosediving, people losing their purchasing power, increasing poverty and …

Of course, political developments, such as the unknown future of the JCPOA and … will render spontaneous falls in the rial’s value. However, we must keep in mind the root reason, being Iran’s deeply corrupt economic structure (or lack thereof).

The Iranian regime, in nature, belongs to a time-period dating back to the Middle Ages, leaving it without any capacity to generate necessary changes.

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