Iran's national currency has plunged to an unprecedented low, trading at 1.2 million rials to the US dollar on Wednesday, 3 December 2025. This dramatic fall marks a new nadir for the rial, driven by the relentless pressure of international nuclear sanctions on Tehran's beleaguered economy.
Sanctions and Stalled Talks Fuel Currency Collapse
The new exchange rate was offered by traders as efforts to revive negotiations between America and Iran over its nuclear programme appear to have stalled. The economic squeeze has been compounded by renewed geopolitical tensions, with many Iranians anxious about a potential new round of conflict with Israel and the United States following a 12-day war in June.
This currency crisis is not new but has accelerated sharply. The rial was trading at 32,000 to the dollar in 2015 when Iran signed a landmark nuclear deal with world powers, agreeing to limit uranium enrichment in exchange for sanctions relief. The situation deteriorated after former US President Donald Trump unilaterally withdrew America from that pact in 2018.
Maximum Pressure Campaign Intensifies Economic Pain
The economic pressure escalated after Trump returned to the White House for a second term in January 2025, restarting his "maximum pressure" campaign. This included targeting firms trading Iranian crude oil, even those offering discounted sales in China.
In a significant blow in late September, the United Nations reimposed nuclear sanctions on Iran using a diplomatic mechanism known as "snapback." These measures once again freeze Iranian assets held abroad, prohibit arms deals with Tehran, and penalise development of its ballistic missile programme.
Daily Life Grows More Difficult for Ordinary Iranians
The record-low rial is having a direct and severe impact on the cost of living. Prices for essential goods, including meat, rice, and other staples, are rising sharply, making daily life increasingly challenging for the population.
Ali Moshtagh, a 53-year-old electrical engineer, expressed widespread concern: "Life will not only become more difficult for ordinary people, but it will also fuel public concern over whether the government — given the limited inflow of foreign currency caused by sanctions — has the resources to maintain and repair the country’s aging infrastructure."
The combination of a crippled economy, soaring inflation, and international isolation presents a formidable challenge for Iran's leadership, with ordinary citizens bearing the brunt of the ongoing crisis.
