Iran's rial hits new low after minister acknowledges slide
The Iranian currency hit yet another all-time low of 780,250 rials to the US dollar on Monday after the country’s economy minister acknowledged the significant devaluation of the currency.
The Iranian currency hit yet another all-time low of 780,250 rials to the US dollar on Monday after the country’s economy minister acknowledged the significant devaluation of the currency.
In a statement during a session of the Iranian parliament's economic commission, Abdolnasser Hemmati said that under normal political and economic circumstances the rial should be trading somewhere close to 73,000 per dollar—a figure significantly higher than Iran’s official exchange rate.
"Of course, this calculation assumes normal economic conditions and stable political and security situations," Hemmati said.
Upheaval in Syria and tensions with Israel along with threats to the economy as US President-elect Donald Trump prepares to take office were among the causes, Hemmati said.
“Given 30% inflation, it is impossible to maintain a stable exchange rate,” Hemmati said.
While Iran has multiple exchange rates, including the open market rate and the official rate, the open market rate most accurately reflects the true value of transactions.
Hemmati further noted that while the government’s official exchange rate is 400,000 rials to the dollar, many goods are traded in the market within the 700,000 to 800,000 rials range.
The reaction to Hemmati’s remarks in Tehran’s currency market was swift and severe. Within hours, the dollar climbed by over 20,000 rials. According to data from Tehran exchange offices, the dollar traded at 780,250 rials, while the exchange rate for dollar remittances rose to 790,800 rials.
The minister later retracted his remarks and said his comments were misinterpreted and that a video of the session had been edited. However, his commentary was widely covered in local media, and currency traders interpreted his comments as a potential sign of further devaluation of the rial.
Hemmati is scheduled to appear before parliament on Tuesday, alongside other officials including the Central Bank’s governor, Iranian media reported. Lawmakers are set to discuss measures to address exchange rate fluctuations and improve economic stability.
The rial has depreciated by over 25% since September, driven by regional conflicts and Iran’s setbacks in Syria and Lebanon.
Since the establishment of the Islamic government in 1979, the Iranian currency has undergone an 11,000-fold decline in value.
The move reflects concerns about escalating conflicts in the region and fears of Iraqi security being endangered after insurgents took control in neighboring Syria.
Iranian-backed militias in Iraq have launched multiple attacks targeting Israel since the Hamas attack on the Jewish state on October 7, 2023.
Following the assault, these militias began their operations by first targeting US forces in Syria and Iraq, before escalating their actions to include strikes against Israel itself.
Known as the Islamic Resistance in Iraq, the groups are a patchwork of Shi'ite militias and factions. The factions joined forces to largely defeat radical Sunni Islamic State in Iraq but continue to exert broad military and political control.
They typically use drones to target Israel, as Iraq does not share a land border with Israel.
A member of the al-Nujaba militia whose name was withheld expressed apprehension that the resurgence of Islamic State in Iraq could mirror or surpass the devastation experienced during the Syrian conflict.
The militia leader told al-Akhbar that the militias decided not to interfere in Syrian affairs and "to follow the situation from a distance, in addition to waiting to understand the orientations of the US President-elect, Donald Trump, and his policy towards the Middle East, specifically Iran."
Harakat Hezbollah al-Nujaba, officially known as the 12th Brigade, is a radical Iraqi Shi'ite paramilitary group primarily active in Iraq and formerly in Ba'athist Syria.
Founded in 2013 by Akram al-Kaabi, the group was established to support Bashar al-Assad's government in Syria against Islamist rebels. It is backed by the Iran’s Islamic Revolutionary Guards' Quds Force, which provides financial support, weapons and training for its members.
The source suggested that a resurgence of Islamic State could upend the relative stability achieved in Iraq.
This follows broader US efforts to curtail the influence of Iranian-aligned forces in Iraq. The Iraqi newspaper Al-Mada mentioned leaked information suggesting a phone conversation between Iraqi Prime Minister Mohammed Shia' al-Sudani and Ahmad al-Shara', leader of Syrian new rulers, mediated by Turkey.
Concerns about ISIS sleeper cells activating across Iraq were part of the discussions.
Prime Minister al-Sudani confirmed Israeli threats to target positions of Iran-backed groups in Iraq, a claim also echoed in Al-Akhbar.
A member of the Kata’ib Sayyid al-Shuhada group also said that their operations against Israel were closely tied to Lebanese Hezbollah's campaigns and ceased following the ceasefire in Lebanon.
The militias' attacks on Israel were "linked to the operations of Lebanese Hezbollah. When the ceasefire was reached in Lebanon, the operations of the Iraqi factions stopped." The spokesman for the Kata’ib Sayyid al-Shuhada militia, Kazem al-Fartousi told the Lebanese daily.
"There are also partners in Iraq who have opinions and reservations about these operations, and they must be listened to."
Kata'ib Sayyid al-Shuhada', officially known as the 14th Brigade, is a radical Iraqi Shiite paramilitary group formed in 2013. Its stated mission is to protect Shi'ite shrines across the globe, preserve Iraqi unity, and put an end to the sectarian conflict. KSS is funded, trained and equipped by the IRGC's Quds Force and Hezbollah.
Prior to these developments, Iran International reported that commanders of the al-Nujaba movement, backed by Iran's Islamic Revolutionary Guard Corps (IRGC), had secretly visited Tehran. This visit underscores ongoing coordination between Iran and its allied militias in Iraq amid evolving regional dynamics.
The reports reflect complex regional calculations, with Iraqi militias seeking to balance their stance based on the domestic power balance and regional military situation.
Simple entertainment such as going to the cinema, buying books, attending theater performances or even subscribing to home streaming services were once standard family activities. But now, they are slowly slipping out of reach for the average Iranian household, as at least one third of the country is living below the poverty line.
Iran's Farhikhtegan newspaper recently broke down the problem by numbers.
“Cinema, books, theater, home streaming, and concerts cost a family an average of about 73,000,000 rials ($94.8), while their minimum income is around 116,000,000 rials ($150 per month). This means that if they want to spend exclusively on cultural activities, they would have to allocate more than half of their income for this purpose."
Before the recent rise in the value of the dollar and the resulting devaluation of the rial, the average monthly income for a family of four was around $200.
However, due to the currency’s continued decline, the average monthly income has now fallen to just $150, further exacerbating the financial strain on Iranian families.
As of this month, the Iranian rial has plummeted to approximately 770,000 rials per US dollar. The sharp depreciation has further deepened the economic hardship for the average Iranian citizen, pushing basic living expenses, including food and medicine, out of reach for many.
The depreciation of the rial, driven by a mix of economic sanctions, inflation, and political instability, has devastated the purchasing power of Iranians, many of whom are now even forced to barter for basic goods like food and are struggling to heat their homes during the bleak winter months.
Cinema and books: The new luxuries
In Tehran, a typical movie ticket costs about 800,000 rials (roughly $1 USD) per person. For a family of four, that means a trip to the cinema costs 3,200,000 rials (around $4.2) just for the tickets.
To watch a film at one of Tehran's more popular cinemas, located at Iran Mall, using an internet taxi for a round-trip journey can cost approximately 3,500,000 rials ($4.5), making the total cost of the cinema outing about 7,000,000 rials ($9.1)—excluding snacks or meals, which could push the total closer to 20,000,000 rials ($26).
Children's books average about 1,400,000 rials ($1.8) per book, and adult books cost approximately 2,060,000 rials ($2.7) each. If a family of four buys three children's books and three adult books in a month, they would spend around 10,000,000 rials ($13). Additionally, supplementary or educational books cost roughly 3,040,000 rials ($3.9 USD) each, adding further strain to a family’s budget.
Theater and concerts: A dream for the few
The cost of attending theater performances has also skyrocketed. High-end theater tickets now range from 6000,000 rials ($7.8) to 14,000,000 rials ($18 USD) for premium shows.
For regular performances, prices range from 4,000,000 rials ($5.2 USD) to 6000,000 rials ($7.8). Even the more affordable comedy shows, which are not quite theater but have gained popularity, cost between 1,500,000 rials ($1.9) and 3,000,000 rials ($3.9).
Concerts, too, are no longer a modest indulgence. Ticket prices range from 2,000,000 rials ($2.6) to 11,000,000 rials ($14.3) for popular performances. On average, a family of four would pay around 26,000,000 rials ($34) for concert tickets alone, without factoring in transportation and food costs.
Subscription services for home entertainment have also become increasingly expensive. For instance, VOD platforms like Filimo, Namava, and FilmNet charge between 1,500,000 rials ($1.9) and 1,650,000 rials ($2.1) per month.
Additionally, families must pay for internet services, which can cost between 2,000,000 rials ($2.6) and 3,000,000 rials ($3.9) monthly. This means that a family could spend up to 8,000,000 rials ($10.4) per month just to access home streaming content.