DOHA: Businessmen and analysts are closely watching the fluctuation of the Iranian currency, which tumbled to a record low yesterday.
The rial tumbled to an all-time low of around 37,500 to the US dollar in the free market yesterday, from about 34,200 at the close of business on Monday, foreign exchange traders in Tehran said. On Monday last week, it traded at around 24,600.
Iran is a major trading partner, particularly of the UAE and most of its imports are routed through re-exports from Dubai. “It’s obvious that re-exports to Iran from Dubai would fall drastically,” a banker told this newspaper yesterday.
However, Iranian exports to the GCC might rise and become cheaper due to the tumbling currency of the country, he added. Iran mainly exports agricultural products, including fresh and dry fruits, to the GCC states.
An idea of Iran’s trade with the UAE can be had from the fact that imports to Tehran were worth $8.97bn in 2009, a figure that was much higher at 13.19bn a year earlier.
Imports to Iran from other GCC states were much less in 2009. They were to the tune of $418m from Saudi Arabia, for instance, and barely $52m from Qatar.
Analysts said figures for the years 2010 and 2011 might show a downward trend in the trade between GCC states and Iran due to the former’s support for the western sanctions.
They said Iran’s tumbling currency was a direct result of the Western sanctions as they are preventing hard currency from flowing into the country, exacerbating its current account deficit.
The sanctions are definitely putting pressure on the Iranian system which might trigger instability in the country. Analysts said they are watching the situation closely to see what impact the development has on the region as a whole.
THE PENINSULA
