Iranian rial sinks to record low as central bank deploys up to $2 billion to support currency

Iran’s rial has fallen to a new record low against the US dollar, providing one of the clearest signs yet that the economic cost of war, sanctions and disruption to oil exports is reaching households across the country.

The dollar traded at around 2.688 million rials on Saturday, compared with 2.632 million on Friday, according to free-market data cited by Reuters. Another market tracker put the rate at about 2.695 million rials per dollar.

Up to $2 billion to support the rial

Iranian state television said state banks had begun selling up to $2 billion in an effort to support the currency. The rial has lost more than half its value over the past year.

Inflation above 70%

The currency slide comes as inflation exceeds 70%, sharply increasing the cost of food, housing and basic necessities. Many Iranians have sought protection for their savings by buying dollars, other hard currencies and gold.

Central bank says fall is temporary

Mehdi Darabi, an adviser to the central bank governor on foreign exchange affairs, attributed part of the fall to what he described as false US predictions about an imminent Iranian economic collapse and said the current decline was temporary.

But the scale of the intervention underscores the pressure on monetary authorities as sanctions and the naval blockade squeeze the country’s main source of foreign currency: oil exports.

The war reaches household finances

The conflict’s impact is no longer limited to the battlefield. Reduced oil revenues, financial restrictions and growing commercial risk are constraining Tehran’s access to hard currency, while the consequences are being transmitted directly into prices, rents and household savings.

Source: Reuters, Iranian state television and free-market exchange data.