The Iranian rial is falling in value again as a new set of sanctions from the United States are just around the corner. The rial dropped to 112,000 against the dollar over the weekend; it has been steadily dropping in value after the United States withdrew from the 2015 nuclear deal earlier this year. The economic sanctions are only the beginning as the follow-on sanctions will target Iranian oil exportation. Both U.S. President Donald Trump and Iranian President Hassan Rouhani have been going back and forth with written altercations.
Iranian President Hassan Rouhani cautioned the United States: “Do not play with lion’s tail,” and that “the mother of all wars” will come from further global isolation via the sanctions. President Trump fired back with a bold tweet, stating that Iran should “NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE,” using all capital letters to drive the point home. The Islamic Revolutionary Guard Corps (IRGC) commander, Qassem Soleimani, chimed in as well, claiming that President Trump had failed in Operation Enduring freedom and would get the same result should the U.S. attack Iran.
The United States is going after Iran in a rather smart fashion despite the childish rhetoric being traded on social media. The Islamic Republic’s economy and diplomatic capabilities are being put into a stranglehold as the U.S. is primarily targeting the nation’s oil trade. Oil exportation is Iran’s primary source of revenue and without it, the country will surely destroy itself from within. Iran is particularly susceptible to inflation as the nation has been subject to large-scale protests in the wake of their deteriorating economy. Traders residing in Tehran’s Grand Bazaar held a strike in response to the rial’s collapse within the foreign exchange market.
While Iran has lost much of its purchasing capability, Iranian exportation of non-oil related goods is in full swing as foreign buyers are able to get products on the cheap. Kermanshah Province-based exports have risen by 44% since March. Foreign buyers are making out well, but Iran is no doubt in trouble as its bleak economic future is just around the corner.