Iranian currency tracking websites and street traders say the rial lost about 17 percent of its value against the dollar on Monday — another apparent indication that Western sanctions are hurting the Iranian economy.
The rial weakened to about 34,500 per dollar in Monday trading on the black market, compared to Sunday's rate of about 29,600.
The Iranian currency has seen its value plunge this year as the United States and European Union tightened economic sanctions aimed at pressuring Tehran to suspend its uranium enrichment program. Iran says its nuclear program is peaceful, but Western powers say it is a cover for developing atomic weapons.
The Western sanctions have curbed Iran's ability to export oil – its main source of revenue – and make financial transactions abroad. Those measures have strained Iran's foreign currency reserves and fueled the black market for dollars needed by Iranian companies to import products from overseas. Iran also faces high inflation and rising unemployment.
U.S. State Department spokeswoman Victoria Nuland Monday said the plunge in the rial proves what she calls the “unrelenting and increasingly successful international pressure” on the Iranian economy.
Nuland said Western sanctions are an important tool in trying to change Iran's policy on its nuclear program.
Iran's economic problems have led to growing domestic criticism of President Mahmoud Ahmadinejad's management of the country.
The Iranian government responded to the currency crisis last month by launching a foreign currency “exchange center” to supply dollars to importers of some basic goods at a special rate slightly cheaper than the official market rate of 12,260 rials per dollar.
But some economists say the government's move appears to have intensified domestic demand for foreign currency and accelerated the weakening of the rial.