The US dollar surged to 1,160,000 rials in Iran’s unofficial market on Saturday, adding to inflationary pressures and deepening worries about the country’s worsening economic outlook.
The US dollar, which traded at about 140,000 rials in 2018, has risen roughly eight-fold since Donald Trump restored US sanctions on Iran seven years ago.
The current dollar rate of 1.16 million rials is just shy of the all-time high of 1.17 million recorded on September 30.
The reimposition of UN sanctions in September deepened the currency shock, Parliamentarian Valiollah Bayati said last month. Addressing President Masoud Pezeshkian, Bayati said public anxiety was mounting.
The sanctions were restored 30 days after Britain, France and Germany triggered the so-called snapback mechanism under the UN Security Council Resolution 2231, citing Iran's failure to comply with its nuclear obligations.
The move restored UN penalties previously suspended under the resolution, tightening external constraints on Iran’s economy.
Farid Mousavi, a member of parliament’s economic committee, warned earlier this month that the currency rise could accelerate in coming weeks. “With inflation continuing at this pace, a 1.3 million-rial dollar rate in winter is not far-fetched."
Official figures show food costs up more than 66 percent over the past year, with bread and grains up 100 percent, fruit and nuts 108 percent, and vegetables almost 69 percent.
The central bank’s latest report also indicates a record surge in capital flight during the spring, underscoring dwindling market confidence.
Rising fuel costs compound volatility
The currency rise follows a domestic fuel-price increase that legislators warn will spill into transport and retail markets.
Mohsen Biglari, secretary of parliament’s budget committee, told the Rouydad24 outlet that higher gasoline costs would influence prices across sectors. “If people have to buy fifty-thousand-rial gasoline, it will certainly affect other goods and services."
The government’s new fuel pricing system, announced on Tuesday, introduces a third rate of 50,000 rials per liter (4.4 cents per the free market rate) for drivers refueling without smart rationing cards or beyond their quota, while keeping existing 15,000- and 30,000-rial rates ((1.3 and 2.6 cents, respectively).
The accelerating dollar, mounting household costs, and weakening investor sentiment together signal a deepening inflationary cycle likely to shape Iran’s economic trajectory in the months ahead.
