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.
Iranian media on Monday described the charges against Esmail Kahrom as relating to making “false statements” and actions “against national security.”
Prosecutors also opened a case against the editor-in-chief of the Jamaran news site, which published Kahrom’s interview.
In the November 30 conversation, Kahrom said that each missile costs roughly two million dollars and argued that if public health mattered to officials, they could redirect the equivalent of 10 missiles to upgrade fuel standards. He said authorities refused because “their priorities lie elsewhere.”
Iran, one of the largest oil and gas producers in the world, is facing a severe natural gas shortage. That shortage has prompted refineries to bulk out the fuel's volume with other substances, like mazut which environmentalists believe has played a major role in Iran's worsening air pollution.
Kahrom warned that the mazut used in Iran contains sulfur levels “seven times the global standard,” and that domestic fuel quality is also inadequate. His comments triggered sharp pushback from state-affiliated outlets.
Mazut, the non-standard gasoline contains harmful additives and has significantly contributed to the air pollution crisis in the country.
The use of the low-grade fuel mazut by power plants in Iran has been linked to severe harm to public health and even fatalities, with Iranians frequently expressing frustration over the worsening air quality and pollution in many cities.
State media dismiss environmental concerns
Young Journalists Club, tied to state broadcaster IRIB, wrote that “certain groups believe defense budgets should be spent on the environment,” calling national security a nonnegotiable necessity and portraying environmental debates as a distraction.
Farhikhtegan, a newspaper affiliated with the state-run Islamic Azad University, similarly argued – referencing the 12-day war with Israel – that critics forget “without deterrence, the cost of war would far outweigh any air pollution.”
Environmental warnings have frequently been downplayed or mocked by officials and pro-government media. Past concerns over water scarcity, energy crises, deforestation and land subsidence have met similar resistance.
A prominent example was the campaign against hydrologist Kaveh Madani, who faced accusations of espionage after warning of impending water collapse and ultimately left the country.
Iran has faced worsening air pollution in recent years alongside severe water and energy shortages, with experts tracing the crisis to aging infrastructure, poor fuel quality and policy inaction.