The story: The Iranian rial, which has been in free fall since anti-establishment unrest broke out in September, has hit an all-time low against the US dollar.

The government maintains that there is no cause for alarm while its affiliated media blame the currency devaluation on the protests and foreign pressure. However, the Ebrahim Raisi administration’s economic policies are also under fire from across the political spectrum.

The coverage: The rial traded for 440,000 against the dollar on the open market on Dec. 28, according to the prominent foreign exchange website Bonbast.

• The Iranian rial has been losing value since protests broke out following the Sept. 16 death of Mahsa Amini, a young woman, in the custody of the morality police.
  
  
• The rial had been relatively stable in the three months before Amini's death, trading for 316,700 against the greenback on Sept. 16.

Minister of Economic Affairs and Finance Ehsan Khandouzi defended the government's policies and blamed the rial's plunge on the unrest in an address to the conservative-majority parliament on Dec. 25.

• Khandouzi told lawmakers that the policies of the Central Bank of Iran (CBI) kept the rial's value stable "before the unrest and riots."
  
  
• The minister vowed that stability would return to the market "in the next month or two."
  
  
• Khandouzi and CBI chief Ali Salehbabadi urged the parliament to pass a government-drafted tax bill, arguing that it would help control the foreign exchange market.
  
  
• The government-run IRNA news agency on Dec. 26 blamed "pressure from the media" for the rial's fall.

However, critics maintain that the government's economic policies are to blame for the weakening of the national currency.

• Parliament Speaker Mohammad Baqer Qalibaf on Dec. 25 accused the government of failing to enforce laws passed by the legislature that he argued would have helped manage markets.
  
  
• Reformist newspaper Hammihan on Dec. 26 criticized Khandouzi for not taking responsibility for the situation and condemned Raisi's Vice-President for Economic Affairs Mohsen Rezaee for being "quieter than ever."
  
  
• On the same day, the Faraz news site noted that the currency devaluation meant that the minimum wage in Iran had dropped from 251 USD in May 2017—when the 2015 Iran nuclear deal was still in effect—to just over 90 USD this month.

Amid the backlash over the rial’s plunge, former CBI chief Abdolnasser Hemmati (2018-21) on Dec. 25 accused President Raisi's public relations team of faking statistics on inflation.

• Hemmati cited official data by relevant authorities to show that annual inflation under Raisi had reached 44%—the highest in four years.
  
  
• Minister of Economic Affairs and Finance Khandouzi insisted the next day that "all reports" by international bodies show that inflation in Iran was going down.

The context/analysis: President Raisi and his administration have long maintained that the economy will not be affected by efforts to revive the 2015 nuclear deal, which is formally known as the Joint Comprehensive Plan of Action (JCPOA).

• Raisi stated in a televised interview in Oct. 2021 that his government "will not tie" people's income to the negotiations to restore the JCPOA.
  
  
• The president insisted that his government would pursue the development of a "resistance economy" through reliance on domestic capabilities and bypassing US sanctions.
  
  
• Months before announcing his candidacy in the 2021 presidential elections, Raisi said that focus should be placed on addressing economic issues "instead of negotiating with the enemy.”

Economic sanctions that had been lifted under the terms of the JCPOA were reimposed after then-US president Donald Trump (2017-21) unilaterally withdrew from the deal in May 2018.

• Talks on the revival of the JCPOA have stalled for months. Most recently, Iran in the early autumn requested amendments to a draft agreement prepared by the EU.
  
  
• Iran on Sept. 2 submitted its latest proposals as part of its indirect back-and-forth with the US facilitated by the European Union.
  
  
• Tehran's main demands include a settlement to the International Atomic Energy Agency's safeguards probe and guarantees from Washington that a future US administration will not renege on the nuclear accord once again.
  
  
• Iran has also said that it wants "stronger" language in the draft text to ensure there are no "ambiguities."

The future: The Islamic Republic has been grappling with months of unrest following Amini's death in police custody.

• The worsening situation of the economy may fuel further protests as the public's purchasing power dwindles.
  
  
• Faced with rising political pressure at home, the government has incentives to signal a readiness for compromise to revive the nuclear deal. However, whether an actual policy change to overcome the ongoing deadlock is in the cards remains to be seen.