Iranian Rial Hits Record Low Following Military Conflict

The Iranian rial crashed to a record low of 1.941 million per US dollar in Tehran's free market on July 18, 2026. The currency has lost approximately 43.7% of its value since the beginning of the year, driving annual consumer price inflation to 88.6%, the highest level since the Second World War.

This economic collapse follows a series of military escalations. In February 2026, Israel and the United States conducted air strikes against Iran, with further US strikes targeting southern regions. Additionally, the United States implemented a naval blockade in the Strait of Hormuz to protect shipping. These conflicts resulted in estimated wartime damages of $300 billion for Iran.

Despite a memorandum of understanding between Tehran and Washington and interventions by the Central Bank of the Islamic Republic of Iran, the currency failed to stabilize. Renewed political tensions and threats from US President Donald Trump to target critical infrastructure in April further contributed to the market volatility.