Economic crisis in Iran: currency collapse and rising prices put pressure on the population

Iran's national currency is plummeting amid war and economic sanctions. On the free market, the exchange rate for one euro rose to the historic mark of three million rials for the first time, as the Iranian financial portal bon-bast.com reports.

Due to the rapid loss of value, the purchasing power of the population is falling drastically. According to financial experts, the average monthly wage has fallen from the equivalent of 120 euros to around 70 euros since the beginning of the year. The devaluation makes the import of consumer goods and raw materials more expensive, which further increases domestic price pressure.

In the past six months, food prices have risen significantly, residents of the capital Tehran reported. The price of a loaf of bread has doubled from 250,000 rials to 500,000. The price of a kilogram of rice increased from 3.5 million to 5.5 million riyals. Meat is now unaffordable for many households.

The US responded to Iran's closure of the Strait of Hormuz with its own blockade of Iranian seaports to put the country under economic pressure. As a result, the Iranian oil trade has almost come to a standstill. The US also imposed sanctions on Iran's supporters, including banks and airlines.

The US further tightened its sanctions against Iran earlier this month. The Treasury Department in Washington announced on Thursday punitive measures against the largest Iranian automobile manufacturers Iran Khodro (IKCO) and Saipa. The railway industry and metal companies such as the steel manufacturer Hepco are also affected, as is a company based in Germany. The rail and automobile sectors are among the Tehran government's "largest remaining sources of revenue," the U.S. Treasury Department said. Assets of the affected companies in the USA will be frozen and business with them will be prohibited.