Iran’s rial reached an all-time low against the US dollar on August 23-24, 2026, trading near 2 million rials per dollar on the unofficial market, marking a year-on-year depreciation of about 108% [1, 2, 3, 4]. The corresponding exchange rate in tomans, the common unit used domestically (1 toman = 10 rials), also broke historic lows, approaching 200,000 tomans per USD [5, 6].
The sharp fall comes after US President Donald Trump announced a “crushing economic operation” on August 19, described by Treasury Secretary Scott Bessent as an "economic D-Day" aimed at isolating Iran financially and severing all economic lifelines supporting the Tehran government [1, 3, 7]. Bessent stated on August 24 new sanctions would target Iran’s oil, finance, technology, aviation, and shipping sectors, emphasizing the US objective “to sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone.” [1, 8, 5]
As part of the sanctions impact, Iran’s main crude oil exports have virtually stopped, according to Central Bank Governor Abdolnaser Hemmati [1, 4]. The United Arab Emirates, historically a top Iranian trade partner, suspended all financial transactions with Iran indefinitely in August 2026 [1, 4]. Iranian officials warned that countries supporting US sanctions would be treated as enemies, with threats including closing the Strait of Hormuz, a critical global oil transit chokepoint. Iran's Supreme National Security Council Secretary Mohsen Rezaei said “Any nation supporting US economic sanctions will be regarded as an enemy and face consequences.” [5, 7]
The sanctions and resulting economic crisis have hit Iran's economy hard. Inflation for food prices exceeded 100%, unemployment rose, and GDP contracted over 5% in 2026, per IMF estimates and regional sources [9, 10, 11]. Many ordinary Iranians express despair over worsening living conditions, with one resident saying, “We have experienced revolution, war, sanctions, rising prices, and hardship... Now we worry for our children and their future, education, and jobs.” Some suggest targeting government officials’ overseas assets would be more effective than broad sanctions hurting ordinary people [3, 12, 7].
China remains Iran’s largest oil buyer and opposes unilateral US sanctions, calling for diplomatic solutions and backing trade cooperation through groups like the Shanghai Cooperation Organisation and BRICS. Iran’s Foreign Minister Abbas Araghchi noted the importance of these alliances “for breaking the monopoly of power and moving toward a fairer international order.” [1]
The rial’s exchange rate rose sharply since February 2026, accelerating after the US and Israel attacked Iran on February 28. In mid-June, the dollar reached about 153,000 tomans, then climbed past 191,000 tomans in July before crashing to historic lows in late August [5, 7]. On August 24, alongside sanctions announcements, the rial traded near 2.02 million per USD and the UAE froze Iran financial transactions [1, 8, 5, 4].
Treasury Secretary Bessent’s sanctions announcement on August 24 marks the latest escalation in US efforts to isolate Iran economically. The impact on Iran’s currency and oil exports underscores the immediate pressure the country faces amid intensifying sanctions and Gulf region financial curbs.
