Iran’s rial plunges past 1.3M per USD, raising fears of soaring food and fuel costs

Iran’s rial slid to a new record low of over 1.3 million per US dollar on Monday, deepening a currency collapse that began less than two weeks ago when it first breached the 1.2-million mark. Traders in Tehran quoted the dollar above 1.3 million rials, highlighting the speed of depreciation since Dec. 3.

The slide is being driven by stalled nuclear negotiations with Washington , ongoing US and UN sanctions , and regional tensions following the June 12-day conflict with Israel . Economists warn that the falling rial is compounding inflationary pressures , raising prices for food, fuel, and daily necessities, and straining household budgets, a situation intensified by recent gasoline price changes .

Iran’s economy has been under pressure for years due to international sanctions , particularly after the US withdrawal from the 2015 nuclear deal. At the time the accord was implemented, the rial traded at around 32,000 per dollar , buoyed by sanctions relief and revived oil exports. Since 2018, renewed US sanctions targeting Iran’s financial sector and energy exports , coupled with UN snapback sanctions freezing assets and restricting arms transactions, have sharply weakened the currency.

The rial’s accelerating decline risks creating a vicious cycle of higher prices and reduced purchasing power , particularly for staples like meat and rice. Analysts say the combination of sanctions, stalled diplomacy, and regional conflict fears is discouraging investment, limiting foreign currency inflows, and heightening uncertainty across markets.

For many Iranians, the new record low reinforces the sense that economic relief remains distant , as diplomatic efforts falter and sanctions tighten, leaving households to navigate soaring costs and an increasingly unstable currency.