A bag full of Iranian rial banknotes is displayed at the currency exchange market on Ferdowsi Street in Tehran, Iran, on Saturday, January 6, 2018.
Ali Al-Mohammadi | Bloomberg | Getty Images
Iran is facing its worst set of crises in years, facing a spiraling economy coupled with a series of unprecedented geopolitical and military blows to its power in the Middle East.
Over the weekend, the Iranian currency, the rial, hit a record low of 756,000 rials against the dollar, according to Reuters. Since September, the beleaguered currency has suffered the effects of devastating strikes by Iranian proxies, including Lebanon's Hezbollah and Palestinian Hamas, as well as the November election of Donald Trump to the US presidency.
With the fall of Syrian President Bashar al-Assad amid a surprise attack 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 and left behind a deeply divided country.
“The fall of Assad has existential implications for the Islamic Republic,” Behnam Ben Taleblu, a senior fellow at the Foundation for Defense of Democracies in Washington, told CNBC. “Let us forget that the regime spent more than a decade in treasure, blood and reputation to save a regime that ultimately collapsed in less than two weeks.”
The currency's decline reveals the extent of the hardship faced by ordinary Iranians, who struggle to buy daily goods and suffer from high inflation and unemployment rates after years of severe Western sanctions exacerbated by internal corruption and economic mismanagement.
Trump has pledged to take a tough stance on Iran and will return to the White House nearly six years after the United States unilaterally withdrew from the Iran nuclear agreement and reimposed comprehensive sanctions on the country.
Iranian President Masoud Pezeshkian expressed his government's readiness to negotiate and revive the agreement, officially known as the Joint Comprehensive Plan of Action, which lifted some sanctions on Iran in exchange for restrictions on its nuclear program. But the attempt to reach out comes at a time when the International Atomic Energy Agency says Tehran is enriching uranium at record levels of up to 60% purity — a short technical step from the weapons standard of 90% purity.
