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Rial loses 10 percent of value

TEHRAN, Jan 25 (AFP) - The Iranian rial continued to plunge against major foreign currencies on Monday, losing around 10 percent of its value in the past two days.

The rial which was trading on the illegal open market at 7,200 to the dollar on Saturday, slumped to 7.500 on Sunday and dropped further to 7,900 on Monday.

The dramatic fall in the black market exchange rate came after a short period of relative calm, following another sharp plunge against the dollar at the end of last year. The rial's fall has been linked to the government's cash crisis prompted by plummeting oil prices on the international market.

Iran banned the open exchange market four years ago in an effort to prevent the collapse of the rial against major foreign currencies.

The government maintains three official exchange rates of 1,750, 3,000 and 5,700 rials to the dollar respectively for state transactions, licensed exporters and some travellers authorised to receive hard currency.

Iran, which earns more than 80 per cent of its hard currency from oil exports, faces a six-billion-dollar budget deficit this fiscal year, which ends on March 20.


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