Two days after the Iranian regime’s Supreme Leader, Ali Khamenei, publicly opposed Tehran’s negotiations with Washington, the U.S. dollar in Iran’s free market surged by more than 65,000 rials, crossing 96,000 rials.
Since Donald Trump’s victory in the U.S. presidential elections, the Iranian rial has depreciated by 30% against the dollar. However, the pace of the dollar’s rise has accelerated significantly in the past few days.
In 2021, Iran’s Planning and Budget Organization had predicted that if sanctions were not lifted, the exchange rate of the U.S. dollar would reach 1.1 million rials in 2025 and soar to 2.85 million rials by 2027.
US Dollar and Gold Coins Hit Record Price Against Iran’s Rial
When the Planning and Budget Organization made this forecast in September 2021, the exchange rate was 280,000 rials per dollar.
Four years later, the reality of the currency market shows that even this government institution’s projection was overly optimistic. The organization had estimated that the dollar would reach 700,000 rials by the end of this year, but it has already surpassed 910,000 rials.
Reasons and factors behind the rise in the dollar’s value.
Undoubtedly, political decisions by the leaders of Iran and the U.S. regarding negotiations and the prospects for reviving the Joint Comprehensive Plan of Action (JCPOA) have had a significant psychological impact on exchange rate fluctuations. This became particularly evident in recent days when Donald Trump signed a “presidential memorandum” reaffirming his administration’s maximum pressure policy on Iran, followed by Ali Khamenei’s rejection of negotiations with the U.S.
Sudden spikes in the exchange rate were also observed during Iran’s two missile attacks on Israel and speculations about Israel’s potential retaliatory actions.
However, after the immediate threat of an Israeli attack on Iran’s economic and energy infrastructure subsided, the exchange rate adjusted—but by far less than its initial surge. Shortly afterward, the upward trend resumed, highlighting the Iranian government’s severe inability to supply the foreign currency needed by the market. The state has effectively lost control over stabilizing the exchange rate.
It appears that the Iranian government is grappling with a growing crisis in obtaining foreign currency through exports of goods and oil.
For instance, to address issues related to transferring foreign exchange earnings from non-oil exports, the government has encouraged merchants since autumn of last year to import gold instead of currency. By December 2024, Iran’s gold imports had surged 3.5 times compared to the same period last year, reaching 81 tons—equivalent to $6.3 billion.
This means that a merchant who previously worked to transfer foreign currency from exports—whether through remittances, the foreign exchange market, direct currency exchange with importers, or direct currency importation—now imports gold instead of currency.
A more significant issue is the decline in Iran’s oil revenues since the fall of 2024, coinciding with Iran’s second large-scale missile attack on Israel and the subsequent U.S. sanctions imposed by the Biden administration on 45 tankers involved in smuggling Iranian oil to China.
During Joe Biden’s four-year presidency, Iran significantly increased its oil exports. However, following the sanctions on dozens of Iranian oil tankers in the fall of this year, its exports declined.
According to tanker-tracking companies, Iran’s daily oil exports dropped from 1.9 million barrels in September 2024 to about 1.3 million barrels in the last quarter of that year. By January of this year, the figure remained below 1.6 million barrels.
Such a sharp decline in oil exports, coupled with rising transportation costs due to recent U.S. sanctions on dozens of tankers linked to Iran, has impacted the country’s foreign exchange revenues.
Half of the approximately 500 tankers that have been involved in smuggling Iranian oil in recent years have yet to be sanctioned. If Donald Trump’s administration were to impose broad sanctions on these so-called “ghost fleet” or “dark fleet” tankers, the Islamic Republic would face severe logistical challenges—especially since China banned sanctioned tankers from entering the port of Shandong, its largest terminal for receiving Iranian oil, last month.
On February 6, in its first sanctions move under the new Donald Trump administration, the United States announced financial sanctions against an international network accused of transferring Iranian oil to China, which included three tankers.
