Wednesday, January 18, 2012

Iran's Currency Plunges to 18,000 to the US Dollar, Trouble Ahead

As a follow-up to my January 2nd posting,"Iranian Rial Declines 35% Since September 2011," earlier today (January 18), Iran's currency, the rial, hit a record low against the US dollar, plunging to 18,000 to the dollar.

Notwithstanding, the EU foreign ministers will be meeting next Monday (January 23) to discuss further sanctions on Iran's economy.

COMMENT: An increasing number of foreign companies are no longer willing to engage in new business with Iran; the European Union has talked about imposing a boycott on Iran’s oil, its major export, and may bring this matter up next week.

Moreover, the US, the EU and a number of other countries are expected to penalize banks that do business with Iran’s Central Bank. Worse, pressure is mounting for a number of countries to stop the flow of money to front organizations friendly to Iran, particularly those in the shipping and travel industries.

No comments: