Iran's Rial Plummets Amid European 'Snapback' Sanctions Threat
Introduction
Iran’s rial currency has fallen to near-record lows as concerns grow that European nations may reimpose United Nations sanctions over its nuclear program. This move, known as the “snapback” mechanism, could freeze Iranian assets abroad and halt arms deals. On…
The Threat of European ‘Snapback’ Sanctions
The United States withdrew from the 2015 nuclear deal with Iran in 2018, but European nations, including France, Germany, and the United Kingdom, have continued to support it. However, tensions have risen as the U.S. has been pushing for the reinstatement of UN sanctions, which were lifted as part of the deal. This has led to fears that European nations may trigger the “snapback” mechanism, causing further damage to Iran’s economy and currency.
The Impact on Iran’s Economy
The rial has already lost about 30% of its value in 2020, and the threat of European sanctions has only added to the currency’s instability. The falling rial has led to an increase in the prices of imported goods, making it more difficult for Iranians to afford essential items. This has also caused a rise in inflation and a decrease in purchasing power, causing further strain on the country’s economy.
