Iran’s Economy Hits a Stunning New Low — And Tehran’s Leader Still Claims He’s Winning

Iran’s unofficial exchange rate crossed two million rials to the dollar this week, a new record low that has sent households scrambling for hard currency as Washington tightens the economic vise.

On August 24, parallel-market quotes tracked by Bonbast opened near 2.02 million rials per dollar. The Central Bank’s official rate sat far below that, around 1.5 million. Ordinary Iranians pay the street price. Because one toman equals ten rials, the dollar also passed 200,000 tomans.

A day earlier, market reports put the dollar at 200,050 tomans in evening trading and the euro at a record 233,700 tomans. By August 25, some quotes had the dollar near 204,000 to 205,000 tomans.

The slide did not start this week. Parallel-market rates were about 1.53 million rials per dollar in early March, after U.S. and Israeli strikes began on February 28, and about 1.865 million at the start of the latest week. Bloomberg cited a 6.7 percent drop after President Donald Trump announced a “crushing economic operation.”

The International Monetary Fund’s July outlook projected a 5.4 percent contraction in 2026 and inflation near 70 percent. Iran’s Statistical Center reported annual inflation of 66 percent in July, with prices 87.9 percent higher than a year earlier and food inflation at 128 percent.

NEW: Qatar’s prime minister arrives in Tehran as the push to de-escalate the war runs headfirst into a warning from President Trump: the U.S. will keep fighting as long as necessary.

Tensions remain high in the Strait of Hormuz, where Iran says the critical waterway will stay… pic.twitter.com/23fUYcoZNY

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Rice prices have risen about 60 percent and beef more than 150 percent since the conflict began, according to Associated Press reporting. The financial daily Donya-e Eqtesad blamed disrupted foreign-exchange transfers, weaker exports, higher import demand, and rising inflation expectations.

Oil, long the backbone of the state’s finances, has collapsed under sanctions and blockade. Central Bank Governor Abdolnaser Hemmati conceded on state television that oil revenues had plunged to near zero. “The same thing has happened to us and it is a reality that we are not exporting oil,” he said.

Hemmati still tried to call the latest currency move temporary. “These increases (in prices of foreign exchanges) are temporary, meaning they fluctuate,” he said, blaming “American political propaganda” and insisting “the situation will improve and the problems will be resolved.”

He added that the bank had supplied an average of $175 million in foreign currency a day since the start of the Iranian year and planned $20 billion for industry through year-end. Those figures have not stopped the street rate from breaking records.

Iranian leadership has framed the squeeze as an “economic war” it intends to win. Markets are delivering a different verdict: a currency at historic lows, inflation eating household budgets, and oil income that even the central bank governor now admits is effectively gone.