Iran’s currency was already tumbling − and then Trump won

As the world absorbed news of Donald Trump’s comeback victory in the 2024 US presidential race, concern in Iran turned to the impact of the election on its own economy amid escalating regional tensions.

Iran’s currency, the rial, fell to an all-time low on November 6. 2024 – trading at above 700,000 rials to the dollar.

But how are Trump’s win and Iran’s economic woes related? The Conversation US turned to Nader Habibi, an expert on the Iranian economy at Brandeis University, to explain.

What has happened to Iran’s currency?

The rial fell to a fresh record low as Donald Trump was claiming victory – trading above the symbolic marker of 700,000 rials to the dollar, according to traders in Tehran, just as results of the US election were coming in.

But it is important to note that Iran’s currency has been losing value steadily in recent months. This has mainly been because of high inflation in the country, which throughout 2024 has been above 30% on a year-to-year basis, and because the government has had to run large budget deficits. It has also been caused by the recent escalation of tensions – and a fresh round of missile exchanges – between Iran and Israel.

As a result of these concerns, Iranians have increasingly been converting most of their savings into US dollars or gold. This, in turn, has led to a depreciation of the rial.

So this trend predated Trump’s win?

Yes. The Iranian economy was already in a perilous state due in large part to the ongoing impact of US-led sanctions on Tehran and ongoing anxiety over the conflict in the Middle East.