The Iranian currency hit an all-time low of 753,000 rials to the US dollar on Saturday, marking the sixth record drop since September, when Tehran began losing influence in the region to Israel and other players.
Compared to the same date last year, when the dollar was valued at 505,000 rials, the current rate represents a staggering 48% rise.
The rial began trading below 740,000 to the dollar on Saturday morning but surged above 750,000 rials by noon.
The euro reached almost 800,000 rials, while the British pound was trading at 950,000 rials. Almost all other major currencies and currencies of neighboring countries also rose against the rial, including the afghani.
One notable shock to the currency market came on November 6, when the dollar initially jumped past 700,000 rials following the news of Donald Trump’s victory in the US presidential elections. But the currency had begun its decline in September after serious blows by Israel against Iran's main regional proxy, Hezbollah and an Israeli air strike that destroyed most of Iran's air defenses.
However, authorities temporarily stabilized the rate below the 700,000 thresholds, most likely by selling foreign currencies to support the rial.
The downward trend resumed later that month after the International Atomic Energy Agency’s (IAEA) Board of Governors issued a resolution critical of Tehran for its nuclear program which has breached international regulations, producing 60% enriched uranium as Iran edges ever closer to nuclear weapons capability.
The fall of Bashar al-Assad in Syria last week came as a new shock to the rial, which fell to new lows several times in recent days.
The rial has faced significant volatility throughout the year, influenced by volatility in the region and direct conflict between Iran and Israel.
Iran’s reliance on oil and gas exports for foreign currency earnings has made the country particularly vulnerable to international sanctions. Under Joe Biden’s presidency, sanctions enforcement eased somewhat, offering Tehran a lifeline. But the return of Donald Trump to the White House, combined with Europe’s increasingly tough stance to crack down on Iran's nuclear program, foreshadows greater economic strain for the Islamic Republic.
Inflation in Iran already exceeds 40%, and the rial’s devaluation will exacerbate price hikes, further eroding the purchasing power of ordinary Iranians.
Tens of millions have faced declining living standards over the past five years, with wages lagging behind inflation and around one third of the population now living below the poverty line.
The average worker who was earning almost $200 per month earlier this year is now getting the equivalent of $150 or less, while official data suggests that $500 is the bare minimum required to meet basic needs.
As the dollar’s rise continues, the impact on daily life for Iranians grows more severe. Essential goods and services, already out of reach for many, are likely to see further price increases, deepening economic hardship and fueling public discontent.