Iranian President Hassan Rouhani owes his re-election in large part to the messaging app Telegram. During Iran’s 2017 presidential election, Iranians relied on the app as a rare source of uncensored news about the race, in which Rouhani was not the candidate most favored by hard-liners.
Just one year later, Telegram may end up becoming Rouhani’s downfall. The app is at the center of Iran’s accelerating currency crash.
The Iranian rial was generally acknowledged to have been on a stable path until May, when U.S. President Donald Trump exited the Iran nuclear deal. Prior to the U.S. withdrawal, one U.S. dollar was worth around 37,000 rials; immediately afterwards, a single dollar jumped to around 44,000 rials. The rial has continued to slump ever since, dropping to 50,000 to the dollar, and then 80,000 rials, and then 190,000 during Rouhani’s speech at the United Nations General Assembly in September. Right now, it is at 120,500 rials.
But it isn’t just U.S. sanctions and the fundamental weaknesses of the Iranian economy that have contributed to Iran’s currency freefall. It’s also the deliberate circulation of rumors and fake news on Telegram by Iranian currency traders and middlemen out to make a profit.
As soon as it became clear that the United States would reimpose sanctions, many middle-class and wealthy Iranians felt a temptation to engage in currency trading, having concluded that the value of the rial would soon decline. For all these Iranians, the goal was to buy dollars. Some Iranians even sold their homes and invested the proceeds in dollars to preserve the value of their assets—or, simply, to secure a profit.
The fire sale of Iranian rials served to weaken the rial even further, and the Iranian government tried to arrest it in various ways, including by banning the official sale of foreign currency. But this only served to make the currency-trading market less transparent—and, correspondingly, more exploitative.