Iran’s currency has plunged through another grim milestone, with the rial falling beyond two million to the U.S. dollar on informal markets as Iranians scramble to protect their savings ahead of additional American sanctions.
On August 24, the rial opened around 2.02 million per dollar on unofficial markets tracked by Bonbast. Iran’s Central Bank continued to maintain an official rate of roughly 1.5 million rials, but that number offers limited comfort to ordinary Iranians because households and businesses generally face the much weaker parallel-market rate.
In the terminology commonly used inside Iran, where one toman equals 10 rials, the dollar crossed 200,000 tomans.
A day earlier, the dollar reportedly reached 200,050 tomans in evening trading, while the euro climbed to a record 233,700 tomans. Subsequent market reports placed the dollar around 204,000 to 205,000 tomans on August 25.
Those are not merely ugly numbers on a currency chart. They translate into brutally higher prices for families trying to buy food, medicine and other necessities.
The rial had already been weakening before U.S. and Israeli strikes on Iran began on February 28. Parallel-market quotations stood around 1.53 million rials per dollar in early March and approximately 1.865 million at the beginning of the week before the latest decline.
Bloomberg reported that the currency dropped another 6.7 percent after President Trump announced what he called a “crushing economic operation” the previous week.
Iran’s broader economic numbers are equally miserable.
The International Monetary Fund’s July outlook projected that Iran’s economy would contract 5.4 percent in 2026 while inflation would reach approximately 70 percent. Iran’s Statistical Center reported annual inflation of 66 percent in July, with prices 87.9 percent higher than a year earlier and food inflation reaching a staggering 128 percent.
The Associated Press reported that rice prices had climbed roughly 60 percent since the war began, while beef prices had increased more than 150 percent.
Iranian financial newspaper Donya-e Eqtesad attributed the rial’s latest slide to several factors, including disrupted foreign-exchange transfers, declining exports, increased demand for imports and growing expectations of additional inflation.
Then there is oil, traditionally the financial engine that keeps Tehran’s government running.
Iranian Central Bank Governor Abdolnaser Hemmati acknowledged on state television that the country’s oil revenues had fallen to almost nothing amid the conflict and U.S.-imposed blockade.
“The same thing has happened to us and it is a reality that we are not exporting oil,” Hemmati said.
For a government heavily dependent upon energy revenue, “near zero” is about as unpleasant as economic terminology gets.
Hemmati nevertheless attempted to portray the currency collapse as temporary.
“These increases (in prices of foreign exchanges) are temporary, meaning they fluctuate,” he said, while blaming “American political propaganda” and insisting that “the situation will improve and the problems will be resolved.”
Perhaps Tehran can convince its television audience. Currency markets appear considerably less impressed.
Hemmati said Iran’s Central Bank had provided an average of $175 million in foreign currency per day since the beginning of the Iranian year and planned to allocate $20 billion to industry through the end of the year.
But governments cannot talk currencies into becoming valuable indefinitely. When citizens increasingly prefer dollars to their own country’s money, inflation is crushing household budgets and oil revenue has collapsed, reassuring speeches start sounding like somebody arguing with the thermometer because he does not like the temperature.
President Trump’s strategy is plainly designed to apply enormous economic pressure to Tehran. Whatever Iran’s leaders say publicly, the collapsing rial shows the scale of the economic strain now confronting the country.
For ordinary Iranians, unfortunately, geopolitical confrontations are showing up in the most painfully practical place possible: the price of dinner.