18MAY

Rial hits new low on Day 100

2 min read

14:44UTC

Iran's rial weakened to 1,762,000 per dollar on 7 June, down from 1,736,000 on 4 June, erasing every gain the market had priced in from deal optimism.

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Key takeaway

Iran's rial hit 1,762,000 per dollar on Day 100, erasing the recovery deal optimism had bought.

Iran's rial hit 1,762,000 per dollar on Day 100, 7 June 2026, weakening from 1,736,000 on 4 June, according to the tracking service AlanChand⁠¹. The rial is the free-market exchange rate ordinary Iranians use, and it is the cleanest daily read on how the country's own people price the war and the prospect of a deal. The latest fall extends the retreat documented on 4 June, when the currency reversed an earlier bounce tied to US testimony.

The slide erases the recovery that diplomatic optimism had bought over the prior fortnight. Each signal of a possible agreement had nudged the rate back; the Day 100 low unwinds all of it, leaving the currency near its record weak point after touching 1,746,000 on 1 June. The market is treating the talks as producing nothing tradeable, and the depreciation compounds the cost of imported food and fuel for households already squeezed by sanctions.

Deep Analysis

In plain English

Iran's currency, the rial, is the money ordinary Iranians use to buy food, medicine, and household goods. Many of those goods are imported, so when the rial weakens against the US dollar, everything bought from abroad costs more in rial terms. On Day 100 of the conflict, 7 June 2026, one US dollar costs 1,762,000 rials on the open market. Three days earlier it cost 1,736,000. Before the war began the rial was already under pressure, but the conflict and sanctions have accelerated the fall dramatically. Iran's own central bank reported inflation of 77.2% in the year to May 2026, the worst since the Second World War occupation of 1942, with daily-needs goods up 113% {{EVREF:/t/Iran-conflict-2026/119/Iran-inflation-at-worst-since-1942/}}. Currency traders use the rial as a real-time signal of how close a deal feels. When Rubio said the deal was '95% done' on 2 June, the rial briefly strengthened. By Day 100 that gain had completely reversed. The market's message is that signed paper has not arrived and may not arrive soon.

Deep Analysis

Root Causes

Iran's rial depreciation rests on a dollar-scarcity structural condition that predates the 2026 war. Under the maximum-pressure sanctions of 2018-2021 the rial fell from roughly 40,000 to the dollar to over 300,000; the conflict has accelerated the same dynamic by an order of magnitude.

The central mechanism is that Iran cannot freely sell oil for dollars, so it cannot maintain foreign-exchange reserves at the level needed to defend the currency. With reserves depleted and oil exports near zero, the open market rate reflects genuine scarcity rather than speculative attack.

Source Landscape

This story draws on neutral-leaning sources

The rial's Day 100 level of 1,762,000 per dollar represents a deterioration from the 1,716,000 Rubio-optimism floor of 3 June and is within 1% of the 1 June record low of 1,746,000. The round-trip erasing deal-optimism gains follows a pattern visible across all five diplomatic windows in this war: the market prices verbal signals sharply, then unwinds them within 48-72 hours when no signed instrument follows.

The structural pressure driving rial depreciation runs through three channels simultaneously. First, oil export revenue has collapsed to below 300,000 barrels per day from 1.84 million bpd before the war, cutting the primary hard-currency inflow by roughly 84%.

Second, OFAC's Economic Fury sanctions have closed crypto and LPG smuggling rails the Central Bank was using to defend the exchange rate. Third, inflation at 77.2% annually, with some items past 300%, creates domestic currency flight as Iranians convert rials to gold, dollars or food before purchasing power erodes further.

For oil-importing countries, the conflict premium in Brent Crude near $97 translates directly into elevated petrol and food prices. The rial's collapse is Tehran's problem; the oil premium is the rest of the world's.

Sources:Alanchand

Mentions:Brent Crude →Iran →Economic Fury →

First Reported In

Update #120 · The deal's last 5% is uranium nobody can find

Alanchand· 7 Jun 2026

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Causes and effects

Caused by

Iranian rial erases its Rubio bounce

The rial's Day 100 fall to 1,762,000 extends the retreat from 1,736,000 on 4 June documented in ID:3891.

Occurred 4 Jun 2026

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Rial passes 2.5 million to the dollar

The same depreciation recorded at 1,762,000 rials per dollar on 7 June 2026 reached more than 2.5 million on 29 September, so the September record continues that series rather than restating it.

Occurred 29 Sept 2026

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This Event

Rial hits new low on Day 100

The currency has unwound a fortnight of diplomatic hope, pricing the deal talk as worthless.

Different Perspectives

Wang Yi

China's foreign minister and Djibouti's issued a joint communique on 21 October saying the war should not reach the Horn of Africa and stressing free navigation through Bab al-Mandeb. The text names neither Iran nor the Houthis, and Djibouti hosts China's only overseas military base, opposite the Yemeni coast.

Ministry of External Affairs

India's foreign ministry called the attacks on Saudi civilian and energy sites "unacceptable" on 22 October and said they must stop at once. An Indian died at Dammam, Indians were injured there and at Shaybah, and about 4,000 Umrah pilgrims remain stranded by one MP's count.

Iraq

Iraq closed the al-Sheeb crossing with Iran to travellers and trucks from 21 October and said other crossings would close gradually. Unlike September's closure, which ended on a staged timetable, this one has none, and Iran's interior ministry said it received no notice.

Abdel Fattah el-Sisi

Egypt's president said on 21 October that Cairo's support would "defend Saudi territory, and does not include an attack on Yemen". Araghchi warned that Egyptian involvement would further complicate the situation, and Cairo's limit matches the one Ankara set on 8 October against attacking another state's soil.

UK Ministry of Defence

The MoD said on 20 October that RAF Typhoons over Saudi Arabia will not strike the Houthis, but extended tanker support to Saudi operations including against Houthi targets in Yemen. The tanker line sets no limit on strikes, so British aircraft may now refuel Saudi jets on bombing runs.

Turkey

Ankara sent the Mecca Joint Defence Agreement to parliament around 20 October, and its published text treats an attack on one party as an attack on all. Article 16 brings it into force only on the last ratification, so the 5 October invocation in Riyadh could not yet bind Turkey.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.