Iranians anxious as inflation soars after Khamenei rejects US talks

The rapid depreciation of Iran's national currency in recent weeks amid fading prospects of direct talks with the US has deeply unsettled many Iranians who face ruin in their daily lives and businesses.

Concerns over further devaluation of the rial are troubling not only ordinary citizens facing soaring prices for essentials like food, housing, and medicine but also producers reliant on imported raw materials.

“As a manufacturer, I must say I can no longer continue production under these circumstances,” Kambiz Ghasemi Jokar, a manufacturer of protective film, posted on X on February 9. He assured customers he would fulfill existing orders but lamented that maintaining his business was no longer viable given the uncertainty.

The rapid fall of the Iranian currency has fueled fears of hyperinflation. “A dollar at 900,000 rials means the destruction of the middle class, civil servants, retirees, and renters, while corruption increases,” Narges Molaei, an Iranian X user.

To reassure the public, Central Bank of Iran’s Economic Deputy Mohammad Shirijan told the Iranian Labour News Agency (ILNA) on Tuesday that inflationary effects from rising forex rates would be minimized.

However, inflation expectations have spiked since late December, when the dollar stood at around 760,000 rials, and especially after Supreme Leader Ali Khamenei’s speech last week rejecting talks with the U.S.

With the Iranian New Year approaching (March 20), demand for imported goods which need foreign currency is increasing, likely pushing rates even higher.

The price of gold has surged alongside the dollar, as many rush to convert savings into gold. Reports circulating online, which have not been verified by Iran International, suggest authorities have restricted bank accounts of forex exchanges and gold traders on Tuesday to curb further price hikes.

“They’ve locked the market—there have been virtually no transactions today,” a gold trader claimed on X. The reports also indicated that curbside forex dealers on Tehran’s Ferdowsi Street, the country’s foreign exchange hub, were intimidated into halting trades.

On Monday, February 10—the anniversary of the Islamic Revolution and a public holiday—citizens reported the rial had fallen to around 940,000 per dollar in the open market.

On Tuesday, state-linked media such as Tasnim News Agency claimed the rate had dropped below 900,000 but social media posts suggested otherwise, with some online forex platforms still reporting rates above 910,000.

The Tehran Stock Exchange (TSE) also reacted to the uncertainties and the looming danger of maximum pressure sanctions on Tuesday with a 1.32 percent drop in its index.

Economic expert Dalga Khatinoglu told Iran International that exchange rates often spike after political shocks—such as Khamenei’s speech or Iran’s recent missile attacks on Israel—but stabilize afterward, though never returning to previous levels.

He also said Iran’s oil revenue has declined, as exports dropped from 1.9 million barrels per day (bpd) in September to around 1.4 million bpd. Meanwhile, US sanctions on 45 oil tankers have increased transportation costs, further restricting Iran’s access to foreign currency.

Ultra-hardliners blame the relatively moderate government—particularly Economy Minister Abdolnaser Hemmati—for the economic turmoil including the chaos in the forex market.

On Tuesday, nearly 90 lawmakers submitted a motion to impeach Hemmati, which has now been referred to Parliament’s Economic Committee for review.