Iran’s rial plunges past 1 million per dollar in record drop

One US dollar equals more than twenty 50,000-rial banknotes.
One US dollar equals more than twenty 50,000-rial banknotes.

Iran’s currency hit a record low of 1,039,000 rials to the US dollar on Tuesday, as the absence of nuclear talks with the US continues to fuel economic uncertainty.

The rial has halved in value since President Masoud Pezeshkian took office in August, deepening concerns over Iran’s worsening economic outlook, amid continuing US economic sanctions and negative regional developments for Iran.

The steep decline began after Israel launched devastating attacks on Iran’s proxy, Hezbollah, in Lebanon in September, undermining Tehran’s regional influence. The election of Donald Trump, who takes a harder line on the Islamic Republic, has added to the uncertainty.

Last week, the currency dropped to one million per US dollar in Tehran, a day after Trump warned Iran of retaliation if its Houthi allies in Yemen retaliated against US airstrikes designed to weaken them.

The rial, which was valued at around 40,000 per dollar in early 2018, began to plummet after Trump withdrew from the JCPOA nuclear deal in May of that year and imposed tough economic sanctions, pushing inflation above 40%.

Prices for food and other essential goods have recently surged, with inflation in these categories estimated at 100%. As the rial continues to lose value, even higher inflation is expected in the coming months.