7 main reasons why the Iranian rial has been depreciating

here are 7 main reasons why the Iranian rial has been depreciating:

1. International sanctions: Iran has been facing various international sanctions for decades, which have had a major impact on the economy. The most recent sanctions imposed by the United States in 2018 have targeted Iran's oil exports, banking system, and other key sectors, making it difficult for Iran to conduct international trade and access foreign currency. These sanctions have contributed significantly to the depreciation of the Iranian rial.
2. Inflation: Iran has been experiencing high levels of inflation for many years, which has eroded the purchasing power of the rial. The inflation rate has been fluctuating between 30-50% in recent years, making it difficult for people to afford basic necessities.
3. Economic mismanagement: Economic mismanagement, including government subsidies, price controls, and the printing of money to cover budget deficits, has also contributed to inflation and the depreciation of the rial. The government has been using the central bank to finance its budget deficit, which has led to more money being printed, thereby causing inflation.
4. Lack of foreign investment: Iran has a relatively underdeveloped economy, and its lack of foreign investment has been another factor contributing to the depreciation of the rial. This is because foreign investors are hesitant to invest in a country with a weak economy and an uncertain political environment.
5. Political instability: Iran has faced significant political instability over the years, which has contributed to uncertainty and volatility in the economy. Political unrest and protests have led to disruptions in economic activity, and have made foreign investors hesitant to invest in the country.
6. Over-reliance on oil exports: Iran's economy is heavily reliant on oil exports, which account for a significant portion of the country's revenue. The fluctuation of oil prices in the global market can significantly impact Iran's economy, and it can also put pressure on the rial.
7. Black market exchange rates: There is a significant difference between the official exchange rate and the black market exchange rate for the Iranian rial. Many Iranians have turned to the black market to exchange their rials for foreign currency, further exacerbating the depreciation of the rial. The spread between the official and black market exchange rates has widened due to sanctions and economic mismanagement, causing further pressure on the rial.