Iranian Rial Falls to Historic Low Against US Dollar
The exchange rate of the US dollar in Iran's free market broke 240,000 tomans on Monday, reaching between 243,000 and 245,000 tomans, marking a record low. 1 toman equals 10 rials, approximately 2.43 to 2.45 million rials per dollar. It opened at about 240,500 tomans, compared to around 233,000 tomans last week; a year ago it was about 111,000 tomans, more than doubling. Some market sources indicated a high point of about 245,000 tomans on that day, with a weekly increase of over 6%.
The official or bank rate remains significantly lower than the market price, with earlier reports around 173,000 tomans, and some records placing the official rate at about 137,000 tomans, widening the gap with the free market. The euro in the free market is around 273,000 to 278,000 tomans, and the pound is about 318,000 to 325,000 tomans. Imam gold coins have risen to about 242 to 247 million tomans. Annual inflation is about 61.4%, with food prices rising approximately 128.1% year-on-year. The US sanctions, including "Operation Economic Outcast," have intensified, compounded by military conflicts affecting shipping and oil insurance in the Strait.
Suppliers are households and importers selling their local currency to exchange for dollars and gold coins, while buyers are currency exchangers and holders who can still supply foreign currency in the parallel market. The driving factors include sanctions, war premiums, and the inability of the official exchange rate to absorb demand, leading to a shift of funds from rial cash to dollars, gold coins, and cross-border assets. Beneficiaries are those who already hold foreign currency or gold coins, while those under pressure are merchants importing basic goods at official prices but restocking at market prices, as well as residents whose wages are denominated in rials. The dual exchange rate reflects both subsidized imports and speculation in the parallel market on the same day’s price list.
Source: Public Information
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The toman quotes represent the real settlement price on the streets and with exchangers, while the official rate is a quota price. The gap between 240,000 tomans and 173,000 or even 137,000 is not a statistical error; it reflects who can access cheap dollars. Doubling in a year indicates that reserve interventions have not kept pace with imports and capital flight. The simultaneous rise of gold coins and dollars to new highs is part of the same hedging trade: after the local currency loses its store of value function, the unit of account shifts to foreign currencies and gold.
In terms of capital flow, sanctions have cut off regular agents, leaving remaining foreign exchange to be transferred through exchangers, hawala, and stablecoins. Previous congressional reports have described USDT as the lifeline of Iran's shadow banking, with the rial's collapse being two sides of the same coin: the more the local currency depreciates, the harder the demand for frozen dollar tokens becomes. War has driven insurance and shipping costs into import expenses, with food prices rising 128% year-on-year as a result of exchange rates and shipping fees, not just a single poor harvest. If the central bank injects limited dollars into the market again, it will only temporarily lower the official price without suppressing the free market.
This is comparable to the 1998 ruble and the 2018 rial cliff after the US withdrew from the nuclear agreement, as well as the long-term split between official and black market prices in Venezuela. The industry phase is wartime sanction economies: the official exchange rate serves basic goods quotas, while the free market sets prices for all other transactions. The wider the dual rate, the greater the rent-seeking, with the interest margin between declared imports and actual resale becoming a stable political rent.
Structural judgments belong to regulatory changes combined with a transfer of pricing power. The mechanism is that after the sovereign currency's foreign exchange rights are taken away by sanctions, the pricing power shifts to the parallel market and cross-border tokens and gold. Maintaining the official rate at 173,000 tomans is an attempt to keep import subsidies on paper; the market reporting 240,000 is pricing the next shipment and the next plane ticket. If the gap does not narrow, inflation targets cannot be achieved solely through interest rates, relying instead on controls and rationing. Each new low for the rial increases the incentive to complete domestic transactions in foreign currencies and stablecoins.
ABAB News · Law of Cognition
The official exchange rate manages quotas, while the free exchange rate manages livelihoods.
The local currency has doubled in value depreciation over the year, with the store of value function dying before the payment function.
The wider the dual rate, the more stable rent-seeking becomes compared to production.