Iran’s currency has fallen to a record low against the US dollar as the two-month-long conflict rattles the country’s sanctions-hit economy.
Air strikes by the United States and Israel, launched at Iran on February 28, along with the American naval blockade on Iranian ports and vessels, have disrupted Tehran’s vital oil exports, hampered domestic production, and fueled inflation.
Iran’s national currency, the rial, dropped to a new low of 1.81 million to the US dollar on April 29 before rebounding the next day. The rial has seen its value fall by nearly 15 percent in recent days, according to Iranian media.
Iran and the United States agreed to a cease-fire on April 8, although Washington increased economic pressure by imposing a blockade on April 13, a move that has made it harder for Tehran to obtain hard currency through exports.
According to Iran’s Central Bank, annual inflation, which was above 40 percent before the war, increased to 50 percent as of April 4.
Iranians say the prices of basic goods such as rice, eggs, and chicken have increased significantly since the conflict began.
Rising inflation was the catalyst for nationwide protests that broke out in January and posed one of the biggest threats to the Iran’s clerical rulers since the Islamic Revolution in 1979.
The authorities responded to the demonstrations with unprecedented force, killing thousands of people, according to human rights groups.
Iran, too, has sought to impose significant economic pain on the United States and its allies. It responded to US-Israel air strikes by effectively closing the Strait of Hormuz, a key artery for global oil and gas supplies, to international shipping.
The move has rattled international energy markets and upended the global economy.
On April 29, the price of Brent crude rose by almost 7 percent to over $126 a barrel, the highest since Russia’s full-scale invasion of Ukraine in 2022.
