Iran currency slumps to all-time low

Iran’s currency, the rial, plunged to an all-time low yesterday, exchange traders said, as Western nations sought to further isolate the country economically and diplomatically.

The rial’s slump coincides with Canada’s unexpected decision to sever ties with Iran and talks among European Union members about introducing further embargoes against Iran.

The United States and its allies have imposed sanctions since the beginning of the year over Tehran’s nuclear activities which they suspect are part of a drive to develop a weapons capability, allegations which Iran has repeatedly denied.

The open-market dollar rate stood at around 24,000 rials, traders said yesterday, a slump of 9 per cent over three days.

“It’s bad,” a currency trader who asked not to be named said by phone from Tehran. “It’s the worst it’s ever been.”

“We are fighting with the world in an economic sense,” the governor of Iran’s central bank, Mahmoud Bahmani, said yesterday. “The conditions we are in are war conditions.”

On Friday, the Canadian government announced it had closed its embassy in Tehran citing Tehran’s nuclear programme, hostility toward Israel and its support for ally Syria.

Simultaneously, the foreign ministers of Britain, France and Germany urged fellow EU member states to ratchet up sanctions against Iran.