Iran’s currency, the rial, experienced a significant drop on Saturday, hitting yet another historic low by plummeting to 653,000 rials per US dollar, amidst escalating tensions with Israel.
This drastic decline, marking the highest exchange rate ever recorded for the American currency in Iran, signifies a nearly 30 percent decrease in the value of the rial since the beginning of January.
Tensions were further inflamed by a recent Israeli airstrike on Iran’s consulate in Damascus, which resulted in the deaths of two high-ranking IRGC commanders and five officers. The Iranian regime has vowed retaliation in response to this attack.
The devaluation of the Iranian rial has been a persistent trend since the 1979 revolution, with the situation worsening notably in 2018 following the US withdrawal from the JCPOA nuclear deal and the imposition of sanctions on Iran’s oil exports and banking sector.
In 1978, the rial was valued at 70 rials per dollar. However, the continuous devaluation has intensified inflationary pressures over the past five years, pushing millions of Iranians below the poverty line. Despite official government figures indicating an annual inflation rate of over 40 percent, many experts believe the actual rate to be even higher.
While Iranian authorities have frequently asserted that US and other sanctions have minimal impact on the nation’s economy, the reality tells a different story. With annual inflation consistently hovering around 50 percent for five consecutive years, tens of millions of people have seen their middle-class status erode, with many struggling to survive on a monthly income of around $200.
Meanwhile, Supreme Leader Ali Khamenei’s reluctance to engage in negotiations to curb Iran’s nuclear program has contributed to ongoing tensions. Tehran’s heightened regional interventions have only exacerbated the situation, further fueling hostilities in the region.