Iran’s rial in free fall: How US sanctions are reshaping daily life, public opinion for the Iranian people

Iran’s economic situation was already in shambles before the current conflict with the US and will likely further deteriorate in the coming weeks.

By Maddie Ali, The Algemeiner

As the Trump administration continues to tighten the economic noose around Iran with US sanctions and a naval blockade, ordinary Iranians are bearing the most immediate cost—but largely blaming their own government for the country’s current financial crisis.

Many Iranian officials publicly insist that Washington’s latest pressure campaign to strangle the economy is ineffective and will fail. Yet in bazaars, pharmacies, and household budgets, the economic damage is no longer concealable.

In late August, the US dollar crossed 200,000 tomans on Iran’s open market—equivalent to more than two million rials—for the first time.

The currency had weakened by more than seven percent in less than a week, reflecting growing anxiety over further US sanctions, restricted oil revenue, and Iran’s declining access to foreign currency.

On Wednesday, Iran’s rial fell to a new record low of about 2.2 million to the US dollar, collapsing from around 1 million rials to the dollar a year ago.

“We can’t afford basic necessities anymore; this government is unable to manage the economy,” a housewife from downtown Tehran told The Algemeiner.

For millions of Iranians, the rial’s collapse is not merely a financial headline.

It means that salaries lose value before they are spent, savings accumulated for years can disappear within days, and imported necessities become increasingly unaffordable.

Shopkeepers struggle to replace stock because the price of the next shipment may be significantly higher than the last.

“Whenever the dollar goes up, the price of everything goes up; people can’t afford it anymore,” said a butcher shop owner.

Families respond by cutting meat, fruit, and other increasingly expensive items for their diets while postponing medical treatment and abandoning purchases once considered routine.

Iran’s economic situation was already in shambles before the current conflict with the US and will likely further deteriorate in the coming weeks.

The US recently expanded secondary sanctions that target countries doing business with Iran, and its naval blockade continues to cut off Tehran’s main source of revenue: oil and gas exports.

According to commodity analytics firm Kpler, Iran loaded about 260,000 barrels of crude oil per day for export at its ports last month, a decline of more than 80% compared with 1.7 million barrels per day in August 2025.

Meanwhile, Iranian President Masoud Pezeshkian said last week that Iran’s overall exports and imports had fallen by between 25% and 35%, with imports plummeting even more sharply than exports.

With the official unemployment rate at 9.1% and the average monthly salary reportedly well below what’s needed for basic household expenditures, the country is facing the possibility of total economic collapse.

“I think it could be within weeks or months—and the economy doesn’t have to collapse; we just have to have the regime come to their senses,” US Treasury Secretary Scott Bessent told reporters on Monday when asked how long it would take for the Iranian economy to collapse.

US sanctions are officially designed to deprive the Islamic Republic of the money it spends on its nuclear and missile programs, military operations, regional terrorist proxies, and human rights abuses inside Iran.

The US Treasury says its campaign has targeted Iranian oil exports, shadow banking networks, cryptocurrency channels, and the vessels used to evade sanctions, arguing these measures have prevented Tehran from accessing tens of billions of dollars in revenue.

But in an economy where the state and institutions connected to the Islamic Revolutionary Guard Corps (IRGC) dominate major industries, pressure imposed at the top doesn’t remain there.

Reduced oil income limits the supply of foreign currency. Banking restrictions complicate trade. Importers pass their higher costs to the retailers, who then pass them to consumers.

Powerful institutions may possess the connections and resources necessary to evade restrictions, but an employee paid in rials has no comparable protection.

“Twenty years ago, we were able to purchase daily necessities, but now the situation is horrible; we can’t even afford bread,” said Amir, a factory worker.

American sanctions contain formal exemptions for food, pharmaceuticals, and medical equipment. However, humanitarian exemptions do not automatically create functioning payment and transportation channels.

A pharmacy worker in the capital said patients were increasingly asking for cheaper alternatives or leaving the store without their prescriptions.

“People come in with a doctor’s prescription, but when they hear the price, they ask what they can remove,” she said.

The problem, she added, was not always an absence of medicine but the inability of patients to afford it after repeated currency declines.

In the southern city of Shiraz, a salaried office employee said his family had stopped buying meat regularly and was postponing repairs to their apartment.

“Our income arrives once a month, but prices change every week,” he said.

A university student in Isfahan described a different kind of pressure. “My parents worked so I could study and have a better life,” he said.

“Now they tell me to find any job I can, even though they know my salary will not be enough for our basic needs.”

He said many young people were considering emigration, while others felt trapped by the cost of leaving.

This crisis is also reshaping public opinion. Many Iranians blame the regime for sacrificing the country’s economic future to preserve its expansive regional ambitions and ideological confrontation with the United States.

According to interviews conducted by The Algemeiner, they believe Tehran could have reduced the economic pressure through serious negotiations with the US but has instead continued policies that prolong sanctions and international isolation.

At the same time, resources that Iranians widely believe should support jobs, health care, infrastructure, and public welfare continue to be directed toward military programs, security institutions, and conflicts across the Middle East that Iranians consider unnecessary.

“I don’t want my country’s money spent on proxy groups and regional conflicts,” a merchant from Isfahan said. “Our government has failed terribly to manage the impact of sanctions and tackle corruption at home.”

Iran supports a wide range of militias and internationally designated terrorist groups across the Middle East, including but not limited to Hamas in Gaza, Hezbollah in Lebanon, the Houthis in Yemen, and various militant organizations in Iraq and elsewhere.

For many Iranians, the collapsing rial is therefore more than a consequence of US sanctions; it is evidence of a government that has chosen confrontation over economic stability.

As living standards decline, frustration over prices and unemployment has increasingly developed into broader political anger, with citizens questioning why they must bear the cost of decisions they neither made nor benefitted from.