A briefcase filled with Iranian Rial banknotes is displayed at a foreign exchange market on Ferdowsi Street in Tehran, Iran, Saturday, January 6, 2018.
Ali Mohammadi | Bloomberg | Getty Images
Iran is facing its worst crisis in years, facing a spiraling economic spiral and a series of unprecedented geopolitical and military strikes against its power in the Middle East.
According to Reuters, Iran's currency, the rial, hit a record low of 756,000 per dollar over the weekend. Since September, the battered currency has been reeling from the devastating fallout from Iran's proxies, including Lebanon's Hezbollah and the Palestinian militant group Hamas, as well as the election of Donald Trump as U.S. president in November.
With the overthrow of Syrian President Bashar al-Assad in a shock offensive by rebel groups, Tehran lost its most important ally in the Middle East. Assad, accused of war crimes against his own people, fled to Russia, leaving behind a deeply divided country.
“The fall of Assad has existential implications for the Islamic Republic,” Behnam ben Taleblu, senior fellow at the Foundation for Defense of Democracies in Washington, told CNBC. “Lest we forget, the regime spent well over a decade of money, blood and reputation trying to save a regime that ultimately collapsed in less than two weeks.”
The currency's plunge highlights the extent of the hardship faced by ordinary Iranians, who struggle to afford basic necessities and suffer from high inflation and unemployment after years of heavy Western sanctions caused by domestic corruption and corruption economic mismanagement was exacerbated.
Trump has vowed to take a hard line on Iran and will return to the White House about six years after the U.S. unilaterally withdrew from the Iran nuclear deal and reimposed sweeping sanctions on the country.
Iranian President Masoud Pezeshkian has expressed his government's willingness to negotiate and revive the deal, officially known as the Joint Comprehensive Plan of Action, which lifted some sanctions against Iran in return for curbs on its nuclear program. But the outreach effort comes at a time when the International Atomic Energy Agency says Tehran is enriching uranium to record levels, reaching 60% purity – a small technical advance from the weapons-grade purity level of 90%.
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