Iranian Currency Drops 96 % in ONE DAY - End of Iranian Regime?1. The Rial Had Been in a Long-Term Decline
The Iranian rial had already been losing value for many years:
In early 2025, the rial was around 817,500 to the USD in official rates. By late 2025, it had slid to around 1.4 million rials per USD, a record low. This represented a massive depreciation over the year due to inflation and economic pressures. So the “96 % drop” is part of a continued freefall, not an isolated one-day glitch.
2. Economic Crisis and Loss of Confidence
By early 2026 the rial’s collapse had reached a crisis level because of:
A. High Inflation and Price Instability
Iran’s inflation was extremely high, well above 40 %, making everyday goods much more expensive and reducing real incomes.
B. Falling Oil Revenues and Sanctions
Western and UN sanctions limited Iran’s oil exports and access to global financial systems. Sanctions forced Iran to sell oil through expensive indirect routes, reducing export revenue.
Oil revenues are crucial to Iran’s economy, so reduced income put huge pressure on foreign exchange reserves and the rial.
3. Loss of Subsidized Exchange Protection
The government had a system where certain businesses could access subsidized foreign currency at fixed rates. When authorities cut or reduced these programs to manage shortages and try to control the economy, it unleashed a large gap between official and market rates. That widened gap triggered panic selling of rials.
4. Political Mismanagement and Fiscal Problems
Economists and observers also point to:
distorted subsidy systems, widespread corruption, rigid economic policies, fiscal imbalance, and lack of policy credibility. These long-term structural issues weakened confidence in the rial and drove people to sell their currency.
5. Protests Are Both Cause and Effect
The currency crash did not happen in isolation, it was intertwined with nationwide unrest:
Protests expanded from economic complaints to political demands against the regime. Many started with shopkeepers and merchants reacting to the rial’s collapse. Because people feared the rial would continue to lose value, they pulled money out of savings and converted to foreign currency (USD) or hard assets, further weakening the rial.
That feedback loop — currency fear → protest → more currency selling — intensifies the drop.
6. Government Response Helped Fuel Panic
As protests grew more intense, the government: shut down internet and mobile networks to control information; used force, leading to hundreds of deaths and thousands of arrests. The uncertainty and breakdown of normal economic activity pushed markets and citizens away from the rial even faster.
7. Why It Looked Like a “One-Day Crash”
In markets that are highly unstable (especially parallel/open market foreign exchange), large moves can look abrupt because:
People exit the currency quickly when confidence evaporates; Speculative trading amplifies moves; There’s no strong official defense (reserves, credible exchange rate policy). So while the rial had been weakening for months, around Jan 6 the rate plunged sharply toward new lows as confidence collapsed, protests intensified, and subsidized rates were removed or at risk.
Disclaimer:
This analysis is for informational and educational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell any securities. Asset prices, valuations, and performance metrics are subject to change and may be outdated. Always conduct your own due diligence and consult with a licensed financial advisor before making investment decisions. The information presented may contain inaccuracies and should not be solely relied upon for financial decisions. I am not a licensed financial advisor or professional trader. I am not personally liable for your own losses; this is not financial advice.
