Dollar Hits Record High as Iran Currency Collapse Deepens

The US dollar surged past 2.7 million rials on Iran’s free market on Sunday, setting a new record amid escalating economic pressures. The decline in Iran’s currency is driven by a US naval blockade and sanctions that have severely restricted oil revenue and foreign-exchange supply. Other major currencies also saw sharp drops, with the euro nearing 3.02 million rials, the British pound around 3.56 million rials, and the UAE dirham at 739,000 rials. Earlier in the day, the dollar briefly reached 2.723 million rials, while the euro and pound climbed above 3.06 million and 3.59 million rials, respectively.

In response to the crisis, five Iranian banks began selling up to $10,000 to each adult at an official rate of 2.57 million rials per dollar. The banks involved include Mellat, Tejarat, Melli, Saderat, and Saman. However, the initiative faced criticism from lawmaker Mehdi Kouchakzadeh, who called it a “crime” that benefits dealers over ordinary citizens. Speaker Mohammad Bagher Ghalibaf defended the program, emphasizing the importance of physical foreign-currency management and pledging to address the issue.

President Masoud Pezeshkian announced a “new posture” for his government, citing exceptional conditions. He stated that adversaries were attempting to cut Iran’s “vital arteries” and pressure the public, but claimed government measures and public cooperation had mitigated the impact. Meanwhile, US Treasury Secretary Scott Bessent warned that Iran would have no oil cargoes at sea this week, meaning no revenue from those shipments. Inflation in Iran remains severe, with consumer prices in September up 89.8% year-over-year and average inflation over the past twelve months at 73.6%.