Iran's Rial Plummets Amid Potential UN Sanctions Over Nuclear Activity

Dubai, Aug 28 (AP) Iran's rial neared record lows on Thursday, driven by escalating concerns in Tehran about potential reimposition of United Nations sanctions over its nuclear activities. European countries are considering triggering the “snapback” mechanism embedded in the 2015 nuclear agreement, designed to be veto-proof and likely to activate after a 30-day period.

If enacted, these measures would freeze Iranian assets abroad, block arms deals, and penalize Iran’s ballistic missile program, among other actions.

On Thursday in Tehran, the rial was trading at over 1 million to USD 1. At the time of the 2015 nuclear deal, it stood at 32,000 to USD 1, underscoring the currency's severe devaluation. Its lowest point was recorded in April at 1,043,000 rials to USD 1.

On August 8, France, Germany, and the UK warned of a possible snapback after Iran halted inspections by the International Atomic Energy Agency (IAEA) in response to Israeli strikes during a recent 12-day conflict. The attacks reportedly claimed the lives of top Iranian military leaders and prompted Supreme Leader Ayatollah Ali Khamenei to go into hiding.

Initially, Iran seemed resigned, choosing to downplay the threat of renewed sanctions and opting for minimal diplomatic engagement. However, following Europe's warning, Iran recently undertook brief diplomatic efforts, highlighting the upheaval within its government.

Iranian Foreign Minister Abbas Araghchi, in a statement last week, expressed Iran’s somber outlook on diplomacy with the West. Araghchi emphasized that negotiations alone might not avert conflicts, as demonstrated when the Israeli offensive coincided with scheduled talks with the United States.

“Weren’t we in talks when the war occurred? Negotiation alone cannot prevent war,” Araghchi told the state-run IRNA news agency. “Sometimes war is inevitable, beyond the scope of diplomacy.”

The core issue is Iran's uranium enrichment, which before the conflict in June had reached 60% purity, close to the 90% needed for weapons-grade material. Iran had amassed enough enriched uranium for several atomic bombs if it chose to manufacture them.

While Iran insists its nuclear program is peaceful, Western nations and the IAEA assess that Tehran maintained an active nuclear weapons program until 2003. The impact of Israeli and US strikes on Iran's nuclear facilities during the conflict remains uncertain.

As part of the 2015 agreement, Iran committed to provide the IAEA greater access than any other nation, including allowing permanent installation of cameras and sensors at nuclear sites, and the use of online enrichment monitors at the Natanz facility. Inspectors also regularly journeyed to Iranian sites to collect data, some utilizing environmental sampling techniques for analysis in Austria.

Despite these measures, growing restrictions since the US exit from the nuclear deal in 2018 have hampered IAEA inspectors' activities. Iran claimed to have relocated uranium and equipment before the strikes, possibly to new, undisclosed locations that could hinder monitoring efforts.

On Wednesday, IAEA inspectors observed a fuel replacement procedure at the Bushehr nuclear reactor, which operates with Russian technical support.

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