Middle East | The American Sentinel Newsletter

Iran’s currency fell more than six percent against the US Dollar in Sunday, hitting a record low, as fears of a US withdrawal from the nuclear deal negotiated by former President Barack Obama continues to drive speculation.

The rial reached 55,200 to the dollar at the close on the open market — a drop of nearly a third in the past six months — according to the Financial Informing Network, considered the most reliable for fluctuations in the free rate.

“There is a clearly an increase of people buying dollars because they think the United States will pull out of the nuclear deal,” said the head of an exchange office in Tehran, on condition of anonymity.

The gap with the government’s official rate, which stood at 37,814 on Sunday, has continued to widen, threatening a return of high inflation which the government has battled to bring under control.

“The government can’t do anything when there is this much panic. If the US exits the agreement, the Iranian currency could collapse even further and reach 70,000 to the dollar,” said the exchange dealer.

The head of the central bank, Valiollah Seif, and Economy Minister Masoud Karbasian were summoned to parliament to discuss the issue last Monday.

Long queues have been seen outside exchange offices for weeks as uncertainty mounts over the nuclear deal which Iran reached with world powers in 2015.

President Donald Trump has threatened to walk away from the deal and reimpose sanctions by May 12 — the next deadline for confirming US involvement — unless new restrictions are placed on Iran’s nuclear and missile programmes.

The rial stood at around 40,000 to the dollar in October, when Trump said he would no longer certify Iran’s compliance with the nuclear deal, and has been falling steadily since.

Iran’s government took drastic measures in February to stem the decline, arresting unlicenced exchange dealers and freezing speculators’ accounts, but they have had little impact.

President Hassan Rouhani, who has staked his legacy on trying to revive the economy by rebuilding ties with the West, sought to play down the decline earlier this year, saying Iran was bringing in plenty of dollars through oil sales.

Saudi Arabia says one person was killed after seven missiles were fired from Yemen by Iranian-backed Houthi rebels on Sunday. It’s the first death on Saudi soil since the Saudi-led coalition began a military intervention in Yemen three years ago.

The missiles were fired at four targets, including the capital city of Riyadh, and all were intercepted and destroyed, said Saudi coalition forces spokesman Col. Turki al-Maliki in a statement. Fragments from the intercepted missiles killed an Egyptian resident, the statement added.

“These hostile acts continue to pose a direct threat to the Kingdom of Saudi Arabia and threaten regional, as well as international, security,” the statement said.

However, in a statement, the Houthi Ministry of Defense claimed the missiles hit seven different targets inside Saudi Arabia, including four airports.

Following the missile strikes, thousands of people reportedly came out onto the streets of the capital Sanaa to take part in demonstrations coinciding with the third anniversary of the intervention against the Houthi rebels.

In a speech to demonstrators, Houthi leader Saleh al-Sammad told the Saudis to “stop your airstrikes, and we will stop our missiles.”

This is not the first time Saudi Arabia has been the target of missile strikes from Yemen and after previous interceptions, the Saudis have responded with airstrikes in Sanaa. The response to this latest incident is likely to be even more punishing.

Of the seven missiles, three were aimed at the Saudi capital city of Riyadh, one was headed toward the southwest in Khamis Mushait, one along the southern border targeting Najran and two for the southern city of Jizan, according to the Saudis.

Videos posted to YouTube, which were included in the official Saudi news release, show explosions illuminating the night sky. Others showed people running to inspect what appears to be missile debris beside a highway.

The Yemeni government, which has been fighting Houthi militia in the north of the country, laid blame for the missile attacks on Iran, which has backed the rebels.

“While the Yemeni government expresses its strong condemnation of this criminal and terrorist act of Iran and its tools represented by the Houthi militia, the government also praised the high efficiency and capabilities of the Saudi Air Defense Forces in intercepting and destroying Iran’s ballistic missiles,” the Yemeni government said in a statement on news agency SABA Net.

The US, an ally of the Saudis, condemned Sunday’s attack by the Houthis and issued a statement saying it supported “the right of our Saudi partners to defend their borders against these threats.”

Between November and December of last year, the Saudis intercepted at least two missiles targeting its capital. Since then, Yemeni rebels have continued targeting locations along the country’s border with Yemen.

What is happening in Yemen?

The Yemen war began in early 2015, when Houthi rebels — a minority Shia group from the north of the country — drove out the US-backed government, led by President Abdu Rabbu Mansour Hadi, and took over Sanaa.

The crisis quickly escalated into a multi-sided war, which allowed al-Qaeda and ISIS to grow stronger amid the chaos.

The Houthis are backed by Iran and its members follow the Shia Islamic branch of Zaidism. Zaidis make up around a third of Yemen’s population and ruled the country’s north for almost 1,000 years until 1962.

The Saudi-led coalition began its air raids in support of Hadi’s government in March 2015.

What has Iran got to do with it?

Saudi Arabia has blamed Iran in the past for supplying the rebels with weapons. After the November 4 missile strike, the Kingdom’s foreign minister accused Hezbollah, the Lebanese Shiite militant and political group that is aligned with Iran, of smuggling missile parts into Yemen.

“Operatives from the Iranian Revolutionary Guards and Hezbollah” helped put it back together again and launch it, Foreign Minister Adel bin Ahmed al-Jubeir reportedly said .

This is a very, very hostile act,” he said. “We have been extending our hand to Iran since 1979 in friendship, and what we get back is death and destruction.”

Iran at the time responded to the Saudi claims of Tehran’s involvement, with Foreign Ministry spokesman Bahram Qassemi calling the accusations “false, irresponsible, destructive and provocative,” according to the Iranian news agency Tasnim.