Iran turns to Turkey and China as the U.S. naval blockade devastates its economy — the central bank leaves the rial to the market

Iran is turning to Turkey and China to soften the economic blow of the U.S. naval blockade, while the Central Bank has chosen to let the market decide the exchange rate of the badly battered rial, as Al Jazeera reports.

Mohammad Eslami, a scholar at the University of Tehran, said that “the central bank’s initial policy and view is now not to fix the exchange rate and to allow the market to make free decisions,” adding that dollars are now available in the country and the central bank is injecting U.S. dollars into the free market.

Referring to the ongoing U.S. naval blockade, Eslami said Iran has the opportunity to make use of more than 7,000 kilometres of land borders, taking measures to ease the situation through agreements with Turkey and through rail exports and imports, as with China.

The development comes at a moment when the rial has fallen to a record low — over 2.5 million per U.S. dollar — and the United States has stepped up its economic pressure campaign with new sanctions on individuals and entities linked to weapons procurement for Iran.