Iran’s rial fell to a fresh record low on Tuesday on unofficial markets, with the US dollar quoted at about 1.47 million rials as authorities seek to defuse public anger over soaring prices.
The euro was trading around 1.72 million rials and the pound at about 19.94 million rials, traders said.
The latest slide follows sharp swings since late December, when the currency’s plunge helped trigger protests in Tehran and other cities that have increasingly taken on a broader political edge.
The government has floated new relief measures after moving to curb access to subsidized foreign exchange used for importing basic goods, a system critics say has fueled distortions and rent-seeking while failing to contain inflation.
President Masoud Pezeshkian’s administration has signaled it will shift support toward households, including a proposed monthly electronic credit or coupon scheme aimed at cushioning low-income families from price rises as the subsidy regime is rolled back.
Iran’s economy has been hit by years of sanctions and chronic inflation, and many Iranians turn to hard currency and gold as stores of value during bouts of political and economic uncertainty.
Fatemeh Mohajerani said the increase was the result of the government’s decision to end subsidized dollars for essential imports in an effort to stabilize the foreign exchange market and curb corruption, a move that has pushed up the local-currency cost of imports of goods and raw material.
“It is evident that by ending or reducing subsidized and preferential official foreign currency exchange rates, the prices of some items will rise,” she said.
Earlier on Monday, parliament said it had approved the general outlines of the budget for the next Iranian year, which begins in March, after the bill was initially rejected and subsequently amended by the government.
The government described the changes as reforms aimed at improving livelihoods, as authorities seek to ease ongoing anti-government protests and strikes.
The revisions are said to include a pay rise of up to 43% instead of 20%, a cut in value-added tax to 10% from 12%, and the allocation of $8.8 billion in subsidized foreign exchange to curb price rises for basic goods.
The budget was also reported to earmark funds for guaranteed wheat purchases to supply bread and for adjusting pensioners’ salaries.
Lawmakers approved the budget framework with 171 votes in favor, 69 against and six abstentions, out of 246 lawmakers present.
Meanwhile, nationwide protests entered a ninth day on Monday, with merchant strikes continuing in parts of the country.
The unrest began after the rial fell to record lows in late December and has since broadened into a wider test of the government’s ability to manage a country under sustained economic strain.
