Iran rial hits record low against dollar amid inflation and unrest
Dubai – Iran’s national currency has fallen to a historic low against the US dollar, reflecting deepening economic stress and persistent pressure on the country’s foreign exchange market. Currency tracking platforms reported that the rial touched 1,500,000 per dollar, marking a new milestone in its prolonged decline and highlighting the challenges facing policymakers trying to restore confidence.
The recent fall means the rial has lost around five percent of its value within a single month, adding to years of depreciation driven by sanctions, inflation, and weak economic growth. For ordinary Iranians, the decline has translated into higher prices for imported goods, rising living costs, and shrinking purchasing power across both urban and rural areas.
Officials have attempted to calm markets by insisting that currency movements are part of a natural adjustment process rather than a sign of systemic failure. The newly appointed central bank governor stated that the foreign exchange market was functioning normally, signaling that authorities do not currently plan dramatic intervention despite growing public concern.
The currency slide comes only weeks after protests erupted in Tehran’s Grand Bazaar, traditionally seen as the commercial heart of the country and an early indicator of economic sentiment. What started as demonstrations over rising prices and hardship quickly spread to other cities, evolving into broader expressions of frustration with governance, economic management, and political accountability.
Although security forces eventually brought the unrest under control, the protests exposed the depth of anger linked to inflation and unemployment. Many households have struggled to cope with soaring costs, while wages have failed to keep pace, leaving the middle and lower-income groups particularly vulnerable to currency volatility.
In response to mounting pressure, the government introduced subsidy reforms aimed at reshaping how essential goods are supported. Preferential exchange rates previously offered to importers were scrapped and replaced with direct cash transfers to citizens, a move officials say is designed to reduce corruption and ensure benefits reach households more effectively.
Senior government figures have defended the reform, arguing that earlier systems failed to curb inflation and instead encouraged rent-seeking behavior. By providing direct assistance, authorities hope to stabilize the currency, improve transparency, and give families greater flexibility in managing expenses for food, fuel, and basic necessities.
Despite these measures, inflation remains stubbornly high. Official statistics show year-on-year inflation nearing 60 percent, underscoring how quickly prices are rising and how limited the impact of recent policy changes has been so far. Monthly household inflation has continued to accelerate, further eroding confidence in economic recovery.
Compounding the situation, Iran’s digital and online economy has been disrupted by ongoing internet restrictions imposed earlier this month. Businesses reliant on online platforms, freelancers, and startups have reported significant losses, adding another layer of strain to an economy already weakened by currency depreciation and reduced consumer spending.
Government representatives have said that while open internet access is preferred, security concerns necessitate continued limitations for now. Critics argue that such restrictions worsen economic isolation, discourage investment, and make it harder for entrepreneurs to adapt to inflationary pressures and currency instability.
Overall, the record fall of the rial reflects a complex mix of economic mismanagement, external pressure, and domestic unrest. Without sustained reforms, credible monetary policy, and restored confidence among citizens and markets, analysts warn that the currency could remain under pressure, prolonging hardship for millions of Iranians already grappling with rising prices and uncertainty.
