Persistent high inflation above 40 percent and longstanding international sanctions continue to drive depreciation of the Iranian rial against the US dollar, with free-market rates fluctuating near 1.3 million to 1.8 million rials per dollar in mid-May 2026. Traders monitor oil export revenues, which remain constrained by enforcement actions, alongside domestic monetary expansion that has fueled currency weakness throughout the first half of the year. With the May 31 deadline approaching, any short-term shifts in trade flows, central bank interventions, or diplomatic signals on sanctions relief could influence whether the exchange rate reaches elevated thresholds before month-end. Market pricing reflects ongoing structural pressures rather than immediate resolution of these factors.