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Economy is a huge thing when studying countries and businesses. The currency of Iran is effected by the economy of the country, because if the country has a low GDP per capita and therefore having a low GDP this will effect the unemployment rate making it much more common. Also when the country is doing poorly like Iran for example it is hard to get anything done in the country. As we mentioned before, Iran is currently in a war, this effects the economy therefore affecting the currency, because locals are fleeing the country due to war. This will effect the country massively hence the fact that there are no people in the country. Although, Iran has a high GDP. Its unemployment rate is 14% and the inflation is 9.3%, this stats show that although Iran is doing pretty well in economics, its currency isn't doing so well this is because of the other three factors which effect this one.

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Terms of trade is the ratio index of a country's export prices to a country's import prices. The terms of trade depends on the money that each one makes. So if the export prices is more than the imports then there is a positive index point. For Iran it is a negative index point because the country imports more than it exports. This effects the currency because when more imports come in the country the inflation rate increases making the products much harder to buy, because of a high VAT tax.

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Psychological factors effecting the Iranian currency

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Psychological factors effecting the Iranian currency

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There is currently a war going on in Iran. It is the Yemeni Civil war, it started in 2015 and it is ongoing to this date. Although this mostly has to do with the political state of the country it also affects the psychology of people, because they know that there is a war in Iran, so this will force people to stay away from the country. How does this effect the currency? Well, when there are no people visiting Persia (Iran), this will result in having no foreign currency. This will decrease the value of the currency. When people hear Iran they think of Middle East and also war between themselves and Iraq as well, which again forces people to move away from Iran and for foreigners to not visit the country.

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https://www.youtube.com/watch?v=UqIiz17mcRs

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http://iranianrial.globalcurrencyreset.net/history-currency-iran/

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The Iraq-Iran war has left a mark that Iran has still not recovered from. Other than that, many terrorist attacks happened in Iran that weakens its currency more and more such as, many bombings through out the last decade and also many assassinations (www.enwikipedia.org/wiki/Assassination_and_terrorism_in_Iran )

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Politics in Iran affecting the currency.

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Politics in Iran affecting the currency.

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Iran’s economy was affected by a trade sanction that caused 27 members of the European Union and the United States of America to ban purchasing of Iranian oil. “The reason for the sanctions was when Iran refused to suspend its uranium enrichment program. U.S. sanctions initially targeted investments in oil, gas, and petrochemicals, exports of refined petroleum products, and business dealings with the Iranian Revolutionary Guard Corps” (http://www.un.org/).

Between 2010 and 2015, the Iranian currency has decreased in value against all major currencies major causes of the decrease of the Iranian currency’s value are the sanctions made by the US.

Then, the EU joined the United States in putting sanctions on Iran, which resulted in the decrease of the Rial value according to the Euro.