On 24/8, one US dollar exchanged for 2.02 million Iranian rials, marking a record low for Iran's currency. This decline occurs as the nation's economy faces severe impacts from international sanctions and the recent US port blockade policy.
The Iranian currency has been under pressure since before the conflict erupted in late February. Double-digit inflation and negative economic growth have caused the rial to repeatedly hit new lows against the US dollar. The ongoing conflict has only worsened the situation.
Nearly all goods in Iran, including food and medicine, have become expensive, with the exception of gasoline, which benefits from government subsidies. Last week, an aide to Iran's President indicated that the country's daily gasoline consumption exceeds its production, suggesting a price increase is possible.
According to the International Monetary Fund (IMF), inflation in Iran is projected to reach nearly 70% by the end of this year. Meanwhile, the country's gross domestic product (GDP) could decline by over 5% after a decade of sanctions.
Official government data indicates the unemployment rate currently stands at 9.1%, though actual estimates may be significantly higher. By the end of May, three months after the conflict began, over one million jobs had disappeared, according to a representative from Iran's Ministry of Labor.
The rial's new low also coincides with Washington's preparations to announce additional economic sanctions on Tehran. On 19/8, President Donald Trump declared an "economic war" against Iran, threatening to sanction any nation supporting Tehran. Treasury Secretary Scott Bessent subsequently pledged to impose an unprecedented level of economic isolation on the country.
Trump and his advisory team believe that economic pressure will compel Iran to accept conditions set by the US to end the conflict. However, experts remain skeptical of this possibility. Tehran has endured Western sanctions for many years and has become adept at circumvention, achieved through increasing domestic production, utilizing informal trade networks, purchasing goods via third countries, and transporting oil using a "shadow fleet".
By Ha Thu (according to Reuters, AP)
