Rial Collapses, Government Hoards Dollars: Iranian Plan for Worst-Case Scenario

The Iranian rial recorded a historic decline against the US dollar, with the exchange rate reaching approximately 2.56 million rials per dollar, amid economic pressures, stringent sanctions, and the ongoing war without a clear prospect for a solution. This triggered a wave of criticism targeting President Masoud Pezeshkian and Central Bank Governor Abdolnaser Hemmati from political, economic, and media circles.

In a notable explanation for this decline, an economic analyst familiar with Hemmati’s thinking told Al-Jarida, requesting anonymity, that the central bank governor deliberately allows the rial’s exchange rate to fall in order to reduce citizens’ purchasing power and encourage them to rationalize consumption, in anticipation of continued economic siege and the possibility that the government may fail to secure basic goods.

The source clarified that Hemmati, known for supporting currency devaluation policies, informed his aides that he had proposed this approach during a meeting of top leadership. According to his account, he received approval from the heads of the three branches of government—executive, legislative, and judicial—as well as from the Supreme National Security Council. The attendees agreed that citizens must be pushed toward austerity, noting that this would not be achieved as long as goods remained available at low or government-subsidized prices.

According to the source, the central bank has the capacity to intervene in the market by injecting foreign currencies and gold, which could support the rial and lower the dollar’s price to below 500,000 rials. However, Hemmati refuses to use these reserves on a large scale, insisting on maintaining foreign currency and gold reserves in anticipation of a worsening crisis.

He noted that the central bank governor expects the coming phase to be more difficult than the current situation, and therefore sees it necessary to preserve available resources rather than depleting them in an attempt to contain the currency’s decline.

In a related development, the source revealed that more than $125 billion in Iranian funds are held abroad by individuals and entities approved by the regime, referred to within Iran as “Trustees.” These funds were supposed to have been repatriated more than nine months ago. The source stated that their failure to return the money has, in his estimation, fueled the economic protests that have swept the country.

He added that the central bank had intended to take legal action to compel these trustees to repatriate the funds, before Hemmati suddenly ordered them to keep the money abroad, justifying the decision by citing Iran’s need to finance the importation of basic goods from various markets.

The source said that Hemmati dismissed several central bank managers who opposed this approach, expressing concerns that some trustees might seize or retain the funds if they felt the regime faced the risk of collapse.

He pointed out that this policy has led to accusations that Hemmati is seeking to keep the funds outside Iran so they remain accessible to influential political figures in the event of a regime collapse. These suspicions are accompanied by fears that the United States could trace and freeze those funds, raising questions about the wisdom of keeping them abroad rather than repatriating them to the country.

If true, this account reflects a rift within Iranian economic institutions over how to manage the remaining financial resources under sanctions—whether to use reserves to support the currency and alleviate living pressures, or to hold them in preparation for potentially harsher conditions in the coming phase.