The value of the Iranian currency, the rial, fell to its lowest level ever on Wednesday, after losing more than 10% of its value since Donald Trump's victory in the U.S. presidential election in November. The drop in the currency's value comes at a time when the Islamic Republic is facing major strategic setbacks in the form of the crushing of Hezbollah's power in Lebanon and the fall of Bashar Assad's regime in Syria, and at the same time as Trump is making vague statements that he does not rule out an attack on its nuclear facilities.
According to reports coming from Tehran, the Iranian currency is trading at 777,000 rials to the dollar today, compared to 703,000 rials to the dollar the day Trump won. For comparison, before the Islamic Revolution in 1979, the currency was worth 70 rials to the dollar, and in 2015, the year Iran signed the nuclear deal with the world powers, under which most sanctions were lifted and in exchange for Iran curtailing its nuclear program, the value was 32,000 rials to the dollar.
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Street lights are off in Tehran due to electricity shortage
(Photo: Atta Kenare / AFP)
On July 30 the day the new Iranian President, Masoud Pezeshkian, was sworn in , the rate was 584,000 rials to the dollar. Pezeshkian was elected president partly on the strength of his promise to forge a new nuclear agreement with the powers that would ease sanctions, but in the meantime Iran's status and economy are only deteriorating, without such an agreement being reached, and without it appearing that the parties are getting closer to it.
The reports of the further drop in the currency's value come against the backdrop of the regime's announcement that schools, universities and government offices in Tehran and more than half of the country's provinces will remain closed on Wednesday due to the energy crisis it is suffering from, following a devastating combination of an intense cold wave, heavy snow and air pollution.
On Wednesday, Tehran's electric company announced that it was forced to turn off the streetlights that normally illuminate the capital's highways at night, due to the strain on the electricity grid. "This policy will continue until a balance is reached between supply and demand," said company official Alireza Rezaei. Tehran has been dealing with power outages on its highways for two months, and on Saturday local traffic police warned of the danger of an "exponential increase in the number of road accidents."
Although Iran has vast gas and oil reserves, years of underinvestment in its infrastructure and international sanctions imposed on it over its nuclear program and its support for terrorist organizations have left its energy sector unprepared for the surge in demand during peak seasons, forcing it to resort to planned power outages and face shortages of ready-to-use gas. It also faced a similar crisis during the heat of the summer.
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In recent weeks, the Islamic Republic has already been forced to impose restrictions on the use of electricity due to a shortage of gas and fuel for its power plants, and the cold wave that has hit the country in recent days has only increased demand, especially for gas, and left it in real distress.
According to Iranian state television, temperatures in 25 of Iran's 31 provinces dropped below freezing overnight. Because of this, schools and public institutions in Tehran were closed for the fourth consecutive day, as were more than half of the country, in an attempt to save energy. Shopping malls in the capital Tehran were ordered to close their doors two hours earlier than usual to join the energy-saving effort.