Iran's rial currency plunges to historic low

  • The Iranian rial took a historic dive against the U.S. dollar on Saturday, according to Iranian media and currency tracking websites.

    The rial shed 5 percent and was trading at about 28,400 to the dollar. That compares with 26,920 on Thursday and 26,400 on Wednesday.

    There is no clear cause for the latest drop in the value of the rial.

    In the past, depreciation has coincided with new sanctions against Iran over its contested nuclear program, suspected by the West to be aimed at obtaining a nuclear weapon.

    Iran has repeatedly denied this, maintaining that its nuclear activity is solely for civilian purposes.

    Earlier this week, the Iranian government set up a new three-tiered currency system in a bid to restore stability to the rial.

    The system, along with a new “exchange center”, enables importers of priority goods such as meat and grains to buy dollars at the official "reference" rate of 12,260 rials to the dollar.

    Importers of other basic goods can buy dollars at a "non-reference" rate 2 percent less than the open market value of the rial on any given day.