TEHRAN, Iran — The Iranian rial has plummeted to an all-time low, declining more than 10% in value since the November election of Donald Trump as U.S. president, posing new difficulties for Tehran amid ongoing conflicts across the Middle East.
As reported by traders in Tehran, the rial is currently trading at 777,000 to the dollar, a significant drop from 703,000 at the time of Trump’s election.
In the past, Iran’s Central Bank has attempted to stabilize the currency by infusing the market with additional hard currency.
In a recent interview on state television, Central Bank Governor Mohammad Reza Farzin indicated plans to increase foreign currency supply to stabilize the exchange rate. He also mentioned that $220 million was recently added to the currency market to support this effort.
The currency depreciation has coincided with Iran announcing the closure of schools, universities, and government offices due to an exacerbated energy crisis brought on by severe winter conditions.
This crisis follows a summer filled with power outages and has now intensified due to cold weather, snowfall, and rising air pollution levels.
Despite Iran’s rich reserves of natural gas and oil, years of inadequate investment and international sanctions have rendered the energy sector vulnerable, leading to frequent blackouts and gas shortages.
During the 2015 nuclear deal negotiations with global powers, the rial was valued at 32,000 to the dollar. In contrast, when President Masoud Pezeshkian took office on July 30, the exchange rate was 584,000 to the dollar.
The escalation of tensions can be traced back to Trump’s withdrawal from the nuclear agreement in 2018, which has contributed to ongoing friction between the two nations.
Iran’s economy has faced numerous challenges due to heavy international sanctions in response to its rapidly progressing nuclear program, which is currently enriching uranium at levels close to those suitable for weapons production.
Pezeshkian’s election followed the tragic helicopter crash that claimed the life of hard-line President Ebrahim Raisi in May, and he came into office promising to negotiate terms for alleviating Western sanctions.
The relationship between Iran and the U.S. remains fraught, 45 years after the 1979 U.S. Embassy takeover and the ensuing 444-day hostage crisis. Historically, before the revolution, the rial was valued at approximately 70 to the dollar.
Today, Iran continues to play an active role in the various conflicts plaguing the Middle East, supporting groups such as the Palestinian Hamas, Lebanon’s Hezbollah, and Yemen’s Houthi rebels as part of its self-styled “axis of resistance.”
