Iran's Currency Continues To Lose Value Against Major Currencies
Iran’s currency, rial has continued to drop against the dollar as the country awaits the resumption of nuclear talks with world powers in less than three weeks.
Iran’s currency, rial has continued to drop against the dollar as the country awaits the resumption of nuclear talks with world powers in less than three weeks.
The rial on Thursday was trading above 284,000 against the US dollar.
There were hopes among Iranians that the national currency can rebound once positive news emerges regarding the resumption of talks to revive the 2015 nuclear agreement, JCPOA. If the nuclear talks succeed, US oil and banking sanctions will be lifted, giving Iran a financial lifeline.
The rial has declined another 2.8 percent in the past seven days, bringing its losses in a month to more than 3 percent and in the past six months to 31.5 percent.
The foreign currency market reaction in Iran can show a lack of optimism about the outcome of the multilateral nuclear talks.
The Iranian rial has lost value ninefold against major currencies since the former US president Donald Trump indicated that he would withdraw from the nuclear deal and impose sanctions. Once he implemented his threat, rial’s fall accelerated in 2018.
Oil exports provide at least half the revenue the Iranian government needs to operate. In the absence of sufficient oil exports, the Central Bank of Iran has been printing money, with liquidity rising rapidly since 2017 and fueling inflation.
The US Navy said that the amphibious assault ship “Essex and the 11th Marine Expeditionary Unit are deployed to the U.S. 5th Fleet area of operations in support of naval operations to ensure maritime stability and security in the Central Region, connecting the Mediterranean and the Pacific through the western Indian Ocean and three strategic choke points.”
In another development, forces from the United Arab Emirates, Bahrain, Israel and the United States Naval Forces Central Command (NAVCENT) began a multilateral maritime security operations exercise in the Red Sea on Wednesday, NAVCENT said on Thursday.
This is the first publicly acknowledged naval exercise between the United States, Israel and the two Gulf Arab countries.
The new naval and Marines’ forces joining CENTCOM’s theater of operations conducted bilateral interoperability training with the Royal Navy’s aircraft carrier HMS Queen Elizabeth with landing helicopters and fixed-wing aircraft on US F-35 fighters and British aircraft cross-landing on each other’s platforms.
The move coincided with Iranian exercises along the Sea of Oman that began on November 7 and included land, air and naval unites. The army said its drills covered an area of one million sq kilometers or 386,000 sq miles, well over half the territory of Iran. Navy vessels and submarines, as well as old American Phantom fighter-bombers and drones took part.
Tensions are high in the region as Iran tries to flex its muscles following Israeli warnings that it will take action if Tehran gets any closer to nuclear capability. An Israeli official told Iran International on October 25 that attacking Iran was now the Israeli air force’s top priority.
The United States has also warned that “other option” could be considered if Iran does not seriously negotiate over its nuclear program.
Iran’s new hardliner government left multilateral talks over reviving the 2015 nuclear agreement in June, delaying resumption of negotiations for five months. New talks are finally scheduled to resume at the end of November, but Iran has been hardening its posture.
Iran also claimed last week that it had a confrontation with the US Navy and prevented the seizure of Iranian oil in the Sea of Oman. The US denied any confrontation and said Iran seized a Vietnam-flagged tanker in October and the Navy was simply observing the incident. Iran finally released the tanker on Tuesday.
Commodore Steve Moorhouse, commander of the United Kingdom’s Carrier Strike Group, was quoted as sayingabout joint drills, “The force development work we have been undertaking with the U.S. Navy has been ground breaking. We are all comfortable with helicopters lilly-padding from one deck to another but doing it with fixed wing aircraft is a whole new game. This level of interoperability goes far beyond anything we have exercised before with any partner and offers a degree of flexibility and agility that Commanders have long dreamt of.”
The US 5th Fleet area of operations covers about 2.5 million square miles of water area and includes the Arabian Gulf, Gulf of Oman, Red Sea and parts of the Indian Ocean. The area encompasses 20 countries and includes three chokepoints, including the Strait of Hormuz, critical to the free flow of global commerce.
