Iranian rial hits new record low against US Dollar

Iran’s currency (IRR) has fallen to new record lows against the US Dollar (USD) as it faces further economic strain from U.S. Sanctions, regional conflict and a naval blockade.

The Iranian rial was traded at about 1.8 million rials per USD on the free market and down from about 811,000 to the dollar just a year ago, according to reports.

After experiencing some stability at the start of the current conflicts, increased volatility recently fueled demand for dollars, the country’s central bank said.

The fall means the currency has weakened further and the devaluation of the currency in Iran is being blamed for inflation, driving up the cost of foreign goods, including the essentials that the Iranias import such as food and medicines as well as their raw materials. – The blockade, in addition to the sanctions, are contributing to strain on Iran‘s economy limiting access to international trade.

The Iranian rial, abbreviated as IRR, is the official currency of the Islamic Republic of Iran. It has been Iran’s legal tender since 1932, when it replaced the Persian qajar-era toman at a rate of 1 toman to 10 rials. The Central Bank of Iran issues banknotes and coins denominated in rials, though physical coins are rarely used today because of persistent inflation. On official documents, price tags, and banking records, the currency unit remains the rial.

Despite being the legal currency, the rial has faced decades of depreciation due to inflation, international sanctions, and economic volatility. The government has attempted currency reforms and redenomination discussions several times, but the rial continues to trade at a wide gap between the official rate set by the central bank and the open market or “free market” rate used by most Iranians for daily transactions. That gap often creates confusion for outsiders trying to track the value of Iranian money.

In the international market, however, people more commonly quote Iranian money in “tomans” rather than rials. This is because, in everyday practice inside Iran, prices have been spoken in tomans for generations, where 1 toman equals 10 rials. Exchangers, traders, and overseas Iranians carried that habit abroad, so quotes, remittance rates, and grey-market prices are listed in tomans to match what people actually understand. Using tomans also makes numbers more manageable — for example, 1,000,000 rials is simply spoken as 100,000 tomans — which is easier to track amid high inflation and frequent zeros on rial denominations.