Iran’s Currency Slumps as Hopes Fade on Renewed US Talks

(Bloomberg) -- Iran’s currency plunged to a new low a day after the country’s supreme leader downplayed the prospect of renewed negotiations with the US over a nuclear deal.

Iran’s business week opened on Saturday with the US dollar changing hands for a record 890,000 rials, according to two local traders.

Supreme Leader Ayatollah Ali Khamenei on Friday said engaging in fresh talks with the US wouldn’t be “wise, intelligent, or honorable,” adding that “one must not negotiate with a government like the US government.”

He cited the failure of Iran’s nuclear deal with world powers, which US President Donald Trump scrapped during his first term in office, leading to crippling sanctions being reimposed. The agreement limited Iran’s nuclear activities in exchange for relief from economic restrictions.

The rial has depreciated by approximately 11% over the past month. While Iran’s foreign exchange market has grown more resilient to diplomatic and geopolitical developments, the currency remains deeply vulnerable to economic strains.

In a reminder of the country’s underlying challenges, Iran’s semi-official Mehr news agency reported that schools, universities, and public institutions were fully or partially closed across most of the country on Saturday, with 27 provinces affected due to a cold snap.

Iran is struggling with a worsening energy crisis. In recent months, the country has faced severe gas shortages, leaving it without enough fuel to supply both power plants and households. As a stopgap measure, the government routinely shuts down industries and public offices to cope with its ongoing energy shortfalls.

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