Iran Crisis: Rial Collapses To 1.5 Million Against US Dollar -What's Behind This Historic Low?

Amid sanctions, rising inflation, and protests across Iran, the west Asian nation's currency has depreciated to 1.5 million Rial against the US dollar. 

The nation-wide economic turmoil gave rise to angst against  President Masoud Pezeshkian’s government, and acts undermining the authority of Supreme leader Ali Hosseini Khamenei, leading to reportedly killing of nearly 3,500 protesters.

Iran’s economy remains severely damaged by international sanctions, especially due to the US sanctions in place that limit access to the banking transactions, international financial mechanisms,and oil exports. Even when Iran is successful in exporting oil, access to hard currency is often restrict ed, delayed, or held overseas.

According to a Reuters survey, Iran’s oil output fell by 100,000 barrels per day in late 2025 due to the sanctions, which directly cut into government revenue. 

Meanwhile, the Statistical Centre of Iran noted that food inflation in September, 2025 reached 58pc, beyond double the rate in the same month the previous year. According to the survey, fruit costs have soared 75pc while bread and grains, which are staples in Iranian households, have almost doubled in price.

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This ignited the downfall of Iranian rial to lifetime lows.

In the later period of 2022, the Iranian Rial had traded nearly 430,000 to the US dollar, however, it traded further lower in 2025. Last year, it began trading at approximately 817,500 rials per dollar, and later recording loss of nearly 45 per cent in value throughout 2025.

Against the US dollar, the rial is trading near 1.65 million on the open market currently. 
 

Earlier, Iran’s parliament had approved a re denomination plan to remove the four zeros from their currency. This alteration is scheduled over a two-year preparation period followed by a three-year transition in which old and new notes would circulate together.

Meanwhile, reportedly officials dubbed it as an accounting reset rather than a solution to hike I inflation and the historic currency depreciation.