Published on 18/07/2026 - 15:45 GMT+2

The US currency reached an unprecedented peak versus the Iranian rial in Tehran's open market on Saturday, exceeding 1.94 million rials as rising military and political strains triggered another sell-off of Iran's money and raised worries about a new inflation surge.

The dollar stood at 1.941 million rials, establishing a fresh record with a gain of 32,000 rials or 1.67 percent over the last unofficial closing level.

The euro also advanced, reaching 2.22 million rials for a rise of 36,000 rials or 1.64 percent from Friday's unofficial close.

This latest jump indicates the Iranian rial has shed about 43.7 percent of its worth against the US dollar since the start of the year, when the dollar exchanged near 1.35 million rials on Tehran's free market.

It advanced to 1.72 million rials after US and Israeli air operations began on Iran on February 28.

With the fighting interrupting business and trade, demand for foreign money eased briefly and the dollar fell back near 1.46 million rials.

After Donald Trump's warning on 7 April of air operations on Iran's key facilities, the dollar recovered to 1.63 million rials before settling around 1.525 million rials once a truce was declared.

With business resuming and official estimates of wartime harm at 300 billion dollars, fresh strain hit the currency market and lifted the dollar near 1.9 million rials.

The agreement reached between Tehran and Washington briefly lifted sentiment, returning the rate to 1.53 million rials.

Yet renewed political strains between the nations soon erased those advances, returning the dollar near 1.7 million rials.

The rial has faced added strain after a new naval blockade of Iran and US air operations on southern areas, moves Washington describes as aimed at weakening Iran's forces and blocking risks to shipping in the Strait of Hormuz.

The fresh escalation has heightened forecasts of further currency losses and quicker inflation.

Official figures show an economy already facing intense price strains.

Inflation has risen sharply in recent months. Yearly consumer price inflation, at 52.6 percent in December 2025, increased to roughly 68 percent in February 2026 before hitting 88.6 percent last month. Iran's inflation level has now reached its highest point since the Second World War.

Ongoing high inflation and swift money growth keep weakening the rial's buying power, while geopolitical unrest has sped up the currency's drop.

A softer rial raises import expenses, boosts inflation expectations and pushes prices higher still, forming a loop that adds pressure on household earnings and the nation's overall economic balance.