Iranian Rial Slides Toward Record Lows After Europe Moves to Reinstate Sanctions

Iran’s currency fell sharply on Saturday, nearing historic lows, after European powers triggered steps to reimpose international sanctions on Tehran over its failure to comply with nuclear commitments.

The rial weakened to around 1,040,000 per U.S. dollar on the unofficial market, according to online exchange monitors and a trader in Tehran. That puts the currency close to its record low of 1,050,000, reached in late March.

The slump followed a joint move by the United Kingdom, France, and Germany on Thursday to refer Iran to the United Nations, activating a 30-day “snapback” process that could restore sanctions previously lifted under the 2015 nuclear deal.

Iranian President Masoud Pezeshkian said Tehran would do everything possible to avoid new punitive measures. “We are not seeking, under any circumstances, to activate the snapback mechanism. We have made every effort to prevent such an outcome,” he told state television.

Foreign Minister Abbas Araghchi denounced the European referral as “immoral, unjustified, and illegal,” warning it would severely damage Iran’s relations with the International Atomic Energy Agency (IAEA).

The United States welcomed the European initiative, while stressing it remained open to “direct engagement with Iran” to pursue a peaceful, lasting resolution.

The currency’s weakness reflects both the looming sanctions risk and broader uncertainty after the collapse of nuclear negotiations earlier this year. The rial had briefly strengthened by about 20% in early 2025 on hopes of revived talks between Tehran and Washington, but optimism faded after Israel launched military strikes on Iranian targets in June, just days before a planned new round of diplomacy in Oman.

Tehran has since warned it could withdraw from the Nuclear Non-Proliferation Treaty (NPT) if the European trio presses ahead. Iranian officials continue to insist their nuclear program is strictly peaceful, accusing Washington of undermining the 2015 deal by both pulling out of the accord in 2018 and authorizing military strikes against Iranian nuclear facilities in June—both under then-President Donald Trump.

The renewed slide of the rial underscores Iran’s growing economic vulnerability as diplomatic isolation deepens and sanctions loom once again.