Iran’s Supreme National Security Council Secretary Mohsen Rezaei admitted that the country is facing one of the most difficult periods in its history, driven by over seven months of conflict with the United States and tightening naval blockades. President Masoud Pezeshkian confirmed the severe economic strain, noting that the administration has adopted a new response posture to manage the crisis.
Iranian Rial Hits Record Low Amid War Sanctions
The economic crisis escalated sharply following the outbreak of war in February, driven by joint strikes from the United States and Israel. The Iranian rial plunged in value, with the downward trend accelerating in recent weeks as Washington tightened sanctions and enforced a maritime blockade.
According to figures tracked by the exchange market site Bonbast and cited by Investing, the rial hit a record low of 2,567,000 to the dollar by September 30. Before the conflict began in mid-February, the exchange rate hovered between 1,500,000 and 1,600,000 rials per dollar, marking a roughly one-third loss in currency value over six months.
The collapse in purchasing power triggered widespread inflation, which surged past 70 percent, according to Investing data. Rising import costs made basic goods, rent, and fuel increasingly unaffordable for everyday citizens.
Discontent spilled over into public protests and workplace walkouts. MBC News reported that nurses, teachers, and various private and government workers announced resignations via social media because wages no longer covered the cost of living. Retired public servants also took to the streets over unpaid pensions.
Central Bank Sells Dollars as Oil Minister Resigns
To stem the currency slide, the Central Bank of Iran attempted aggressive market interventions. State television reported that state-owned banks began selling up to 2 billion dollars to support the rial, though the effort proved insufficient against broader systemic pressures, as detailed by Investing.
At the same time, the maritime blockade choked off crude oil exports, depriving Tehran of its primary foreign revenue source and triggering a severe domestic fuel shortage. Amid this mounting pressure, Oil Minister Mohsen Paknejad resigned from his post. While the presidential office stated through state television that Paknejad stepped down for personal reasons “long ago” and that President Pezeshkian accepted the request, the departure coincides with the collapse of official projections that oil shipments would remain unaffected by sanctions.
| Metric / Indicator | Pre-War (February) | Recent Data (Late September) |
|---|---|---|
| Rial Exchange Rate (per USD) | 1,500,000 – 1,600,000 rials | 2,567,000 to 2,695,000 rials |
| Inflation Rate | Lower baseline | Exceeding 70% |
| Central Bank Support Action | Standard operations | Injection of up to $2 billion |
| Primary Revenue Stream | Active crude oil exports | Severely disrupted by naval blockade |
Diplomatic Stalemate Over the Hormuz Strait
Economic suffering deepened as diplomatic channels with Washington stalled. Following a provisional roadmap memorandum of understanding signed in July through Pakistan’s mediation, talks broke down over disagreements regarding control of the strategic Strait of Hormuz.
To jump-start negotiations during the United Nations General Assembly in September, Tehran offered a seven-point confidence-building proposal. According to international reports, the proposal demanded an end to the US maritime blockade, the immediate return of frozen assets, exemptions for Iranian oil export sanctions, and a halt to combat operations across all fronts. In exchange, Tehran pledged to reopen the Strait of Hormuz within seven days. However, both nations remain locked in a dispute over the implementation sequence of sanctions relief versus the reopening of the waterway.
