THE STUDY OF RIAL-DOLLAR EXCHANGE RATE BEHAVIOUR IN THE SHADOW OF SANCTIONS

The exchange rate refers to the value of one country's currency in relation to another country's currency. Exchange rates are determined by a variety of factors, including economic and political conditions, interest rates, and trade balances. Exchange rates have a significant impact on international trade, as they affect the cost of importing and exporting goods and services. They also affect the value of international investments and the purchasing power of individuals who travel or make purchases in foreign countries. Iran's exchange rate is a topic that can be quite complicated due to the country's complex economic and political situation. In recent years, Iran has experienced significant fluctuations in its exchange rate, with the value of its currency, the Iranian rial, declining significantly against major currencies like the US dollar and euro. One major factor affecting Iran's exchange rate is economic sanctions imposed by the United States and other countries, which have limited the country's ability to export its oil and conduct international financial transactions. Additionally, inflation and other economic factors have also played a role in the devaluation of the rial. Exchange rate modeling is a crucial tool for businesses, investors, and policymakers who want to understand the factors affecting exchange rates and make informed decisions about currency transactions, international trade, and monetary policy. Some common exchange rate modeling techniques include time series analysis, which looks at past exchange rate data to identify trends and patterns that can be used to forecast future rates. Other techniques include econometric modeling, which uses mathematical models to analyze the relationships between exchange rates and various economic variables like interest rates, inflation, and GDP. This article examines the behavior of the exchange rate between the Iranian Rial and the US dollar in the context of economic sanctions imposed on Iran by the United States and other countries. Using a combination of quantitative and qualitative analysis, the study investigates the impact of sanctions on the exchange rate, as well as the underlying economic and political factors driving currency fluctuations in Iran. Moreover, the study utilizes time series analysis to explore the trends and patterns of the exchange rate over 2015-2023. The findings of the study suggest that economic sanctions have had a significant impact on the Rial behavior, leading to a decline in its value against the US dollar. Additionally, the study identifies a range of other economic and political factors that contribute to the volatility of the exchange rate, including inflation, political instability, and fluctuations in oil prices.