Iran’s currency sank to a new all-time low on Monday with the US dollar climbing to 1.26 million rials but the country's finance minister described the slide as a normal result of a brief war with Israel in June.
Market data also showed that the benchmark Emami gold coin was trading at its own record of 1.32 billion rials, up more than 2.5 percent from the start of the week. The dollar had gained roughly the same amount over that period.
The British pound crossed 1.6 million rials and the euro rose beyond 1.45 million rials, capping a volatile two-day rally.
The latest surge prompted unusually sharp criticism from media outlets affiliated with Iran’s Revolutionary Guard. The Fars and Tasnim news agencies, which typically avoid acknowledging free-market exchange rates, openly attacked the relatively moderate administration of President Masoud Pezeshkian for the sharp rise.
But Finance Minister Ali Madanizadeh sought to justify the inflationary shock during a Student Day speech at Sharif University.
“Do you expect the dollar to fall when the country has just come under an unprecedented military attack and suffered several hundred trillion tomans in damage?” he asked, referring to the 12-day conflict with Israel.
He compared the government’s situation to that of “a doctor operating in a field hospital under bombardment."
Inflation and foreign-exchange volatility have intensified since the return of UN sanctions in September and Tehran’s insistence on maintaining its nuclear enrichment program in defiance of the international community's demands.
Over the past year, food prices have risen more than 66 percent on average, squeezing households and straining purchasing power.
Root causes of malaise
Iranian state media have blamed a recent cabinet decision allowing imports of essential goods using foreign currency reserves not provided by the Central Bank. Outlets have argued that the move has pushed importers into the open market and fueled demand for hard currency.
Fars News said the measure “disrupted the market,” while Tasnim described it as a “strategic mistake” that sent the wrong signal to traders and amplified inflation expectations.
Economists point instead to long-standing structural drivers—especially rapid money-supply growth—combined with heightened political uncertainty.
Arash Hasannia, an economic journalist, told Iran International that the pressures have driven precautionary investment toward gold and foreign currency.
He noted that, unlike in previous years, the government and the Central Bank have refrained from intervening to stabilize the rial.
“It appears the Central Bank lacks the capacity to enter the market,” he said, adding that the bank seems reluctant or unable to inject scarce reserves to slow the currency’s decline.
Suspicions by critics that the government deliberately allows the exchange rate to rise to cover budget shortfalls have resurfaced again this fall, but Hasannia stressed that no evidence substantiates the claims.