FALLING BY THE HOUR: Rial drops 15% to 34500 to the dollar (with further analysis)

Economists say hyperinflation occurs when the monthly inflation rate exceeds 50%.  It ends when the monthly inflation rate drops below 50% and stays that way for at least a year. 

By that defintion has hyperinflation already started in Iran?   If not, will it do so with another day or two like today as the effects of today’s event reverberate through the economy?   These are questions I’ll explore in a series of subposts here.   All analysis dealing with Iran is my own.   For the, I’m indebted to a very lengthy article at Wikipedia though I’ve greatly reduced the length and jargo.

Two days ago the rial dropped 6% in one day and we thought that looked bad.   A week ago the open-market rate of the Iranian Rial was 24350:1 to the US dollar (an all-time low).   Noting that “This fall is chaotic, confused, and without any sign of a strategy for recovery. Enduring America Scott Lucas asked, “Can a ‘resistance economy’, under the siege of mismanagement within and sanctions without, continue to resist?”   Watch how things changed during the day as EA kept track:

0833 GMT: Currency Watch. Marc Burleigh of AFP reports that the Iranian Rial has dramatically fallen this morning on the open-market. It has fallen 9%, shattering the 30000:1 mark vs. the US dollar to rest — for the moment — at 32500:1.

And the “ripple effect”, even before this morning”s latest development — the Rial is also falling quickly in the subsidised “trade room” set up by the Central Bank for importers and other selected customers. The Iranian currency on Sunday was down to 26720:1 in the Bank’s sale of foreign exchange, a drop of 9%.

1009 GMT: Currency Watch. The currency website Mesghal now confirms that the Iranian Rial has fallen almost 10% this morning on the open market and is an all-time low of 32600:1 vs. the US dollar.

The site also posts the surge in gold prices, with a 25% increase in a week for old gold coin to 12.55 million Rials (about $1025 at official rate).

1138 GMT: Currency Watch. The Iranian Rial is now at 34000:1 vs. the US dollar, a drop of almost 15% today.

1233 GMT: Currency Watch. As the currency crisis deepens, the Iranian Rial has dropped still further to 34500:1 vs the US dollar.

 

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