As part of its strategy to counter US economic sanctions, Iran has effectively granted subsidized foreign currency to importers of essential goods. The aim of this has been to ensure that the prices of basic products such as food and medicine do not rise considerably despite the drastic drop in the value of the rial on the open market. Yet food prices have soared significantly over the past few months, indicating that the allocation of cheap hard currency to food importers has been ineffective.
The rial first began a steep fall in early 2018 as concerns grew over the chances that the Trump administration would withdraw from the Joint Comprehensive Plan of Action and would reimpose sanctions on Iran. The national currency dropped to an all-time low in late September 2018 — four months after the United States finally pulled out from the nuclear deal — when the dollar was said to have traded for 190,000 rials. The Iranian currency has since regained some of its value, presently trading for around 130,000 against the greenback on the open market.
