Iran's currency falls to a record low against the dollar as tensions run high

TEHRAN, Iran (AP) — Iran ’s rial currency traded Saturday at a record low against the U.S. dollar as the country returned to work after a long holiday, costing over 1 million rials for a single greenback as tensions between Tehran and Washington likely will push it even lower.

The exchange rate had plunged to over 1 million rials during the Persian New Year, Nowruz, as currency shops closed and only informal trading took place on the streets, creating additional pressure on the market. But as traders resumed work Saturday, the rate fell even further to 1,043,000 to the dollar, signaling the new low appeared here to stay.

On Ferdowsi Street in Iran’s capital, Tehran, the heart of the country’s money exchanges, some traders even switched off their electronic signs showing the going rate as uncertainty loomed over how much further the rial could drop.

“We turn it off since we are not sure about the successive changes of the rate,” said Reza Sharifi, who works at one exchange.

Iran’s economy has been severely affected by international sanctions, particularly after U.S. President Donald Trump unilaterally withdrew America from Tehran’s nuclear deal with world powers in 2018. At the time of the 2015 deal, which saw Iran drastically limit its enrichment and stockpiling of uranium in exchange for lifting of international sanctions, the rial traded at 32,000 to the dollar.

After Trump returned to the White House for his second term in January, he restarted his so-called “maximum pressure” campaign targeting Tehran with sanctions. He again went after firms trading Iranian crude oil, including those selling at a discount in China.

Trump meanwhile has written to Iran’s Supreme Leader Ayatollah Ali Khamenei, trying to jumpstart direct talks between Tehran and Washington. So far, Iran has maintained it is willing for indirect talks, but such discussions under the Biden administration failed to make headway.

Meanwhile, Trump is continuing an intense airstrike campaign targeting the Iranian-backed Houthi rebels in Yemen, the last force in Tehran’s self-described “Axis of Resistance” able to attack Israel after other militant groups were mauled by Israel during its war on Hamas in the Gaza Strip.

Mehdi Darabi, a market analyst, said he believed that foreign pressures in recent months caused “expectations for the possibility of a decrease in oil sales and more inflation, and it caused a higher rate for hard currencies,” according to Tehran’s Donay-e-Eqtesad economic newspaper.

A pensioner who gave only his first name, Saeed, for fear of reprisals, said if Iran stopped its hostile policy toward the outside, financial relief could be possible.

“If we want to live a comfortable life, we should maintain good ties with our neighbors," he said. “We shouldn’t bare our teeth at them. They will do the same.”

Economic upheavals have evaporated the public’s savings, pushing average Iranians into holding onto hard currencies, gold, cars and other tangible wealth. Others pursue cryptocurrencies or fall into get-rich-quick schemes.

Meanwhile, internal political pressure remains inflamed still over the mandatory hijab, or headscarf, with women still ignoring the law on the streets of Tehran. Rumors also persist over the government potentially increasing the cost of subsidized gasoline in the country, which has sparked nationwide protests in the past.

Iran's theocracy has responded by dialing broadly back hijab enforcement and easing restrictions on at least one political figure.

On Saturday, the state-run IRNA news agency even quoted a portions of a statement from Mehdi Karroubi, a Shiite cleric, parliament speaker and two-time presidential candidate who has been held in his home since the 2011 Arab Spring protests. Karroubi, who also was one of the leaders of Iran’s 2009 Green Movement protests, is in the process of being released from house arrest.

“The end of my house arrest has coincided with a super-crisis that has ... put the country at the verge of devastating war,” his statement said.

The falling rial has put more pressure as well on Iranian reformist President Masoud Pezeshkian. In March, when the rate was 930,000 rials to the dollar, Iran’s parliament impeached his finance minister, Abdolnasser Hemmati over the crashing rial and accusations of mismanagement.

Anger over government spending also saw Pezeshkian fire his vice president in charge of parliamentary affairs, Shahram Dabiri, for taking a luxury cruise to Antarctica, state media reported. Though Dabiri reportedly used his own money for the trip with his wife, the Instagram photos posted of his trip angered an Iranian public scrapping by to survive.

“In a situation where the economic pressures on people are huge and the number of deprived people is massive, expensive recreational trip by officials even by their own personal fund is not defendable and reasonable,” Pezeshkian said in firing Dabiri, who so far hasn’t offered any public explanation for his trip.

Pezeshkian separately said Saturday that Iran wanted a “dialogue from an equal position” with the U.S.

"If you want negotiations, what is the point of threatening?" Pezeshkian asked, according to IRNA. “America today is not only humiliating Iran, but the world, and this behavior contradicts the call for negotiations.”

Gambrell reported from Dubai, United Arab Emirates.

People walk through the old grand bazaar of Tehran, Iran, Saturday, April 5, 2025. (AP Photo/Vahid Salemi)

People walk through the old grand bazaar of Tehran, Iran, Saturday, April 5, 2025. (AP Photo/Vahid Salemi)

Iranian banknotes are displayed by a street money exchange at Ferdowsi street, Tehran's go-to venue for foreign currency exchange, in downtown Tehran, Iran, Saturday, April 5, 2025. (AP Photo/Vahid Salemi)

A salesman waits for customer at the old grand bazaar of Tehran, Iran, Saturday, April 5, 2025. (AP Photo/Vahid Salemi)

A street money exchanger poses for a photo without showing his face as he counts U.S. dollars at Ferdowsi square, Tehran's go-to venue for foreign currency exchange, in downtown Tehran, Iran, Saturday, April 5, 2025. (AP Photo/Vahid Salemi)

A street money exchanger poses for a photo without showing his face as he counts U.S. dollars at Ferdowsi square, Tehran's go-to venue for foreign currency exchange, in downtown Tehran, Iran, Saturday, April 5, 2025. (AP Photo/Vahid Salemi)

A currency exchange bureau worker counts U.S. dollars at Ferdowsi square, Tehran's go-to venue for foreign currency exchange, in downtown Tehran, Iran, Saturday, April 5, 2025. (AP Photo/Vahid Salemi)

FILE -A street money exchanger poses for a photo without showing his face as he counts Iranian banknotes at a commercial district in downtown Tehran, Iran, Dec. 23, 2022. (AP Photo/Vahid Salemi, File)

WASHINGTON (AP) — House Republicans narrowly approved their budget framework on Thursday, a political turnaround after Speaker Mike Johnson worked into the night to satisfy GOP holdouts who had refused to advance trillions of dollars in tax breaks without deeper spending cuts.

Johnson stood with Senate Majority Leader John Thune early in the morning at the Capitol and said President Donald Trump's “big, beautiful bill,” which seeks as much as $1.5 trillion in cuts to federal programs and services, was on track. The speaker had abruptly halted voting Wednesday night.

“I believe we have the votes,” said Johnson, R-La. “We’ll take the next big step.”

Thune, R-S.D., also tried to assure House conservatives that many GOP senators are aligned with their pursuit of spending reductions.

“We certainly are going to do everything we can,” Thune said.

The 216-214 vote pushed the budget plan forward, one more milestone for Johnson, who could only lose a few detractors from his slim Republican majority. A failed vote, particularly as the economy was convulsing over Trump’s trade wars, would have been a major setback for the party's agenda in Washington.

Trump, at a black-tie fundraising dinner this week, had admonished Republicans to "stop grandstanding” on the budget.

By Thursday morning, Trump had shifted his tone, posting on social media that it's “coming along really well."

“Biggest Tax Cuts in USA History!!! Getting close,” Trump said.

The House action was a crucial next step in a lengthy process to unlock the centerpiece to the president's domestic agenda of tax cuts, mass deportations and a smaller federal government. There are weeks, if not months, ahead, on a final product, with more votes in Congress. Democrats, in the minority, lack the votes to stop the package, but they have warned against it.

But by Wednesday afternoon, the outcome was in flux. At least a dozen conservative Republicans, if not more, were firmly against the plan. Several of them, including members of the ultraconservative Freedom Caucus, made the unusual move of walking across the Capitol to meet privately with Senate GOP leaders to insist on deeper cuts.

As night fell, Johnson pulled a group of Republicans into a private meeting room as House proceedings came to a standstill. They stayed into the night hashing out alternatives, and were back at it in the morning.

Johnson said he spoke with Trump for about five minutes while the GOP meeting was taking place. The speaker said they were trying to figure out the minimal number of cuts and savings “that will satisfy everyone.”

“The president is very anxious for us to get this done,” Johnson said.

But House GOP conservatives, including several of those who met with Trump this week, were concerned that the Senate GOP's blueprint, approved last weekend, did not cut spending to the level they believe necessary to help prevent soaring deficits.

“The Math Does Not Add Up,” Rep. Chip Roy, R-Texas, posted earlier on social media.

Rep. Andy Harris, R-Md., the caucus chair, led others to met with the senators.

“All we can do is make sure that they understand where we’re coming from and how close we want to work with them to get to the final product,” Thune said afterward.

But he panned the idea of the House sending back an amended version, which would require another potential all-night voting session like the one senators endured last weekend. “We can’t do that,” Thune said.

The House and Senate are at the beginning phase of a process that will take weeks, if not months, as they turn their budget resolutions into legislative text — a final product with more votes ahead later this spring or summer.

House Democratic leader Hakeem Jeffries of New York said the budget plan is reckless and callous, proposing cuts to give tax breaks to the wealthy.

“We’re here to make it clear,” Jeffries said. “Hands off everyday Americans struggling to make ends meet.”

Central to the budget framework is the Republican effort to preserve the tax breaks approved in 2017, during Trump's first term, while potentially adding the new ones he promised during his 2024 campaign. That includes no taxes on tipped wages, Social Security income and others, ballooning the price tag to some $7 trillion over the decade.

The package also allows for budget increases with some $175 billion to pay for Trump's deportation operation and as much for the Defense Department to bolster military spending.

It would be partly paid for with deep cuts to domestic programs, including health care, as part of the $2 trillion in reductions outlined in the House version. Several Republican senators have signaled they are not willing to go that far.

To clip costs, the Senate is using an unusual accounting method that does not count the costs of preserving the 2017 tax cuts, some $4.5 trillion, as new spending, another factor that is enraging the House conservatives.

Two Republican senators voted “no” last weekend. Maine Sen. Susan Collins objected to Medicaid cuts in the House's framework, while Kentucky Sen. Rand Paul argued the whole package relied on “fishy” math that would add to the debt.

The plan would also raise the nation's debt limit to allow more borrowing to pay the bills. Trump had wanted lawmakers to take the politically difficult issue off the table. With debt now at $36 trillion, the Treasury Department has said it will run out of funds by August.

But the House and Senate need to resolve their differences on the debt limit, as well. The House GOP increases the debt limit by $4 trillion, but the Senate lifted it to $5 trillion so Congress would not have to revisit the issue again until after the midterm elections in November 2026.

With Trump's trade wars hovering over the debate, House Republicans tucked a provision into a procedural vote that would prevent House action — as the Senate has taken — to disapprove of Trump’s tariffs.

Associated Press writers Mary Clare Jalonick, Stephen Groves, Leah Askarinam and Matt Brown contributed to this report.

Rep. Chip Roy, R-Texas, right, and Rep. Scott Perry, R-Pa., members of the conservative House Freedom Caucus, meet outside of the closed-door House Republican Conference as Speaker of the House Mike Johnson, R-La., talks to fellow Republicans to push for a House-Senate compromise budget resolution to advance President Donald Trump's agenda, at the Capitol in Washington, Tuesday, April 8, 2025. (AP Photo/J. Scott Applewhite)

Rep. Jim McGovern, D-Mass., the ranking member of the House Rules Committee, challenges Budget Committee Chairman Jodey Arrington, R-Texas, as President Donald Trump's top domestic priorities on spending reductions and tax breaks are prepared for a floor vote, at the Capitol in Washington, Wednesday, April 9, 2025. (AP Photo/J. Scott Applewhite)

House Budget Committee Chairman Jodey Arrington, R-Texas, joined at right by Rep. Brendan Boyle, D-Pa., the ranking member, defends the Republican plan to advance President Donald Trump's top domestic priorities on spending reductions and tax breaks as the House Rules Committee prepares the measure for a floor vote, at the Capitol in Washington, Wednesday, April 9, 2025. (AP Photo/J. Scott Applewhite)

Speaker of the House Mike Johnson, R-La., leaves the chamber after an essential procedural vote passed in the House to advance President Donald Trump's top domestic priorities on spending reductions and tax breaks, at the Capitol in Washington, Wednesday, April 9, 2025. (AP Photo/J. Scott Applewhite)

Rep. Chip Roy, R-Texas, a member of the conservative House Freedom Caucus, listens as the Republican plan to advance President Donald Trump's top domestic priorities on spending reductions and tax breaks is prepared in the House Rules Committee for a floor vote, at the Capitol in Washington, Wednesday, April 9, 2025. The deficit hawk has blasted the GOP plan drawing the ire of both Trump and House Speaker Mike Johnson. (AP Photo/J. Scott Applewhite)

Speaker of the House Mike Johnson, R-La., talks to reporters about his push for a House-Senate compromise budget resolution to advance President Donald Trump's agenda, even with opposition from hard-line conservative Republicans, at the Capitol in Washington, Tuesday, April 8, 2025. (AP Photo/J. Scott Applewhite)