Iran's currency crisis deepens with soaring inflation

Amid a budget bill emphasizing heavy military spending and the looming threat of an Israeli attack, Iran's currency, the rial, matched its previous all-time low against the US dollar on Wednesday.

The rial, which began its decline in September, plummeted to 670,000 against the dollar, while Iranian officials and state-controlled media remained silent on Wednesday. In mid-August, the currency was trading at 585,000 to the dollar, representing a drop of more than 10% in under two months.

Iran is already grappling with soaring inflation exceeding 40%, and the rial's continued decline will drive prices even higher, further impoverishing a population that has seen its purchasing power erode significantly since 2018. 

That year, U.S. sanctions imposed by the Trump administration—following its withdrawal from the 2015 nuclear deal—targeted oil exports and banking, slashing Iran’s income and dealing a severe blow to its oil-dependent economy.

Over the past five years, tens of millions of Iranians have seen their living standards erode as wages fail to keep pace with soaring inflation. Today, the average worker earns roughly $200 per month, while official estimates suggest that a minimum of $500 is needed for basic survival.