But it is not only the Iranians who are feeling the effects of the international sanctions, which include restrictions on banking, shipping and all kinds of external commercial ties.
The southern Iraqi city of Karbala is a major destination for religious tourism and, although Muslim pilgrims come from all over the world, most of them have traditionally come from neighbouring Iran. Between 5,000 and 6,000 Iranian tourists come to Karbala every day and most stay for several days as part of package tours that take in all the surrounding holy sites.
Now, because of the sanctions against Iran and the currency devaluation, the numbers of Iranian tourists has dropped. Additionally the average Iranian visitor will need to spend double the amount they used to, to visit the various holy shrines they’d come to see. before sanctions, Iranians would have spent the equivalent of US$1,000. Now they’re spending nearly double that: around US$2,000.
Previously Iranian currency – the rial – had been traded in Karbala, along with the US dollar and the currencies of various Gulf Arab states, from where any of Karbala’s visitors also come. However the drop in value of the Iranian currency caused the city’s exchange shops to stop dealing in the Iranian rial two months ago.
Shop owners in both Karbala and Najaf, the other city popular with religious tourists, both stopped dealing in the Iranian rial two weeks ago, when its unofficial value crashed so dramatically. Now all transactions are done in either the Iraqi dinar or the US dollar.
Some local merchants expect the Iranian currency’s value to drop even further. All of which will impact on the number of tourists from Iran, many of whom had already expressed shock that the rial had fallen so far against the dinar and the dollar; apparently they had not expected it.
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