Iran’s government is scrambling to contain a currency crisis after the rial hit an all-time low, prompting panic-buying of hard-to-find dollars amid political uncertainty.



The Iranian currency has been steadily losing its value against the dollar since the 1979 Islamic revolution, when one dollar bought 70 rials.



This week, one dollar was exchanged for up to 60,000 rials in central Tehran, as people sceptical of the country’s economic performance and uncertain about its future political stability rushed to get hold of more-stable foreign tender.

President Hassan Rouhani initially succeeded in controlling currency fluctuations inherited from his predecessor. While one dollar bought 36,000 rials in 2013, when he was first elected, it was the equivalent to 40,000 rials in April last year and 60,000 rials on Monday.



Vice-president Eshaq Jahangiri said the government would impose a unified rate of 42,000 rials for a dollar. On Tuesday, there were no signs that the policy was being successfully implemented as many currency exchanges in Tehran closed their shops to avoid long queues. Others did not sell.



The central bank, whose governor general was summoned to speak behind a turbulent session of the Iranian parliament on Tuesday, also limited the amount of foreign currency people that were allowed to keep in cash to €10,000 (£8,700) or equivalent.



The crisis comes three months after protests over economic grievances that soon took on a political dimension and spread to up to 80 cities, taking politicians by surprise. In May, Donald Trump faces a deadline to either sign a presidential waiver on sanctions on Iran, or withdraw the US from the 2015 nuclear accord. The latter would have severe consequences for Iran as it the nuclear-related sanctions that were lifted as part of the agreement may be restored.



Saeed Laylaz, a prominent Tehran-based economist close to the Rouhani team, said both internal and external political reasons were driving the currency devaluation. Some officials have blamed Iran’s regional rivals, including US-backed Saudi Arabia and the UAE, for limiting Tehran’s access to dollars.

“In the past 20 years, we have consistently been having hard currency surplus, even under Mahmoud Ahmadinejad … so you have to look for domestic and international political reasons to understand this,” he told the Guardian. “We’re not facing a currency crisis, we’re facing a crisis in accessing currency notes, and there’s a big difference. If you want to access currency in the form of LCs [letters of credit], no matter [whether] you’re in the private or public sector, you can get it.”



Only 5% of foreign currency in Iran is estimated to be in the form of notes for sale in banks and exchange markets. The rest is accessible through credits for business, he said. Iran had a $17bn currency surplus last year, when its non-oil exports reached $47bn and it sold $55bn worth of oil.



Bijan Khajehpour, a Vienna-based Iranian economist, echoed Laylaz in saying that political and non-economic factors had contributed to the current situation. “Political [reasons] could be a fear of harsh sanctions or external pressure because of Trump’s attitude towards Iran,” he said. “There could also be reasons because of internal factional fighting and competition for power and pressure on Rouhani.”

Khajehpour said the currency nosedive was not down to the country’s economic performance, but could have an impact on it. “We’re in a period of transition both in terms of relationship between the government and the deep state but also space that it has provided for corrupt practices. We’re in a very delicate phase in political relationships depending on what the outcome is – Rouhani can either be weakened or strengthened,” he said.



“If this so-called unification of exchange rate is implemented successfully, if they manage to unify the exchange rate and pull through and provide enough liquidity to the market, then to keep this rate or around this rate, it will be a real achievement.”