Iranian Currency Plummets at the Start of Economic Sanctions
Data from two websites tracking exchange rates in the free market showed that the Iranian currency fell to a record low of more than two million rials per dollar. The Iranian currency hit an all-time low against the dollar amid an escalating US campaign to weaken the country’s economy, about six months into the war. According to exchange rate tracking site Bonbast, the Iranian currency reached 1.992 million rials per dollar in the parallel market, down 4.5% since US President Donald Trump announced an “overwhelming economic operation” against Tehran last week. The unofficial exchange rate tracking site TGJU reported that the Iranian currency surpassed the two-million-rial-per-dollar threshold before closing at a slightly lower level.
The Iranian currency is under pressure due to US efforts to isolate Iran by threatening its few remaining trade partners, coinciding with a blockade on its main ports in the Arabian Gulf and the strangulation of oil exports, which are a primary source of the country’s foreign currency revenues. Iranian Central Bank Governor Abdolnaser Hemmati stated that the country’s crude oil exports have “effectively stopped.” Last week, the United Arab Emirates, one of Tehran’s key trade partners, announced the suspension of all financial transactions with Iran until further notice.
US Treasury Secretary Scott Bessent wrote in the Financial Times: “Our goal is to cut off every economic artery that keeps the authoritarian regime alive, leaving Tehran isolated,” warning that “the day of reckoning or economic victory” would begin at dawn. Iran’s financial newspaper Donya-e Eqtesad reported that the currency’s decline was driven by disruptions in foreign exchange transfers and falling exports, alongside rising demand for imports and higher inflation expectations.
China, which purchases most of Iran’s oil, said US economic pressures would not succeed and called for a diplomatic solution to the war, which is nearing its sixth month. An Iranian foreign minister hinted that Tehran would strengthen trade with partners aligned with China to counter US pressures. Abbas Araghchi wrote, “We believe that frameworks such as the Shanghai Cooperation Organization and BRICS represent effective tools to break the monopoly of power and move toward a more just international system.” He added, “Iran is determined to make the most of these opportunities.”
