Iran's rial dives 4% to record low

Iran's currency, the rial, dived four percent to a new low of around 28,000 to the dollar in open trading on Saturday, deepening a month-long sell-off, according to exchange tracking websites and the Mehr news agency. The new rate was down from the 26,900 rials per dollar fetched on Thursday, the last day of trading. The sharp dive -- and a steep rise in the price of gold bought in Iran -- suggested Iranian families and companies were rushing to buy dollars and other foreign currency because of economic uncertainty. The rial has lost over 60 percent of its value since the end of last year, as draconian Western economic sanctions take effect. That has spurred already high inflation to even greater heights, with food costs soaring more than 50 percent. Speculation of military action against Iran by Israel, with or without the help of its ally the United States, has grown in the past couple of months. Israeli Prime Minister Benjamin Netanyahu, in a speech Thursday to the UN General Assembly, implied action would have to be taken against Iran before the middle of 2013 if it continues with its nuclear activities at the current rate. Iran, which denies Israeli and US allegations that it has nuclear weapons ambitions, has made some efforts to mitigate the weakening of the rial, but to little durable effect. This week it opened an "exchange centre" which puts importers and exporters in touch which each other to arrange informal currency swaps aimed at skirting US financial restrictions that curb the ability to repatriate money to Iran.