While many observers ascribe the weakening of the Iranian rial in recent months to the psychological impact of increasing US pressure on Iran, the currency crisis has domestic roots, too. Indeed, the partly privatized Iranian economy has given birth to a web of interest-driven relations between those in power and those with wealth.
Since late 2017, when the drop in the rial’s value first began accelerating, the administration of President Hassan Rouhani has desperately tried to control the whereabouts of billions in hard currency earned by major quasi-state exporters. Their wide profit margin is guaranteed by incentives they receive from the government. Yet these same companies act based solely on their own interests, which are entangled with the interests of some policymakers.