SpecialEurasia:

Executive Summary

The report analyses the immediate economic and geopolitical effects of current events in Iran, encompassing the private sector’s formal appeal to President Masoud Pezeshkian for urgent currency and regulatory reform amid a “neither war nor peace” climate, alongside a significant strengthening of Central Bank actions against rial-based stablecoin channels.

The objective is to provide decision-relevant facts and analysis to inform policy options that mitigate capital flight, restore market confidence and preserve productive capacity.

Key Findings

Private sector leaders warn that prolonged political and external tension has shifted the operating environment from calculable risk to pervasive uncertainty, threatening investment and production.

Central Bank interventions (closure of rial crypto gateways and daily price caps) aim to curb capital flight but risk displacing transactions onto unregulated venues, exacerbating systemic opacity.

Immediate policy priorities are convergent: stabilise the exchange rate architecture, rationalise foreign-exchange allocation (including “imports without currency transfer”), and re-embed the private sector in formal FX market mechanisms.

Scenario context

Iran is facing a complex and volatile economic environment marked by high inflation, currency depreciation, and structural uncertainty. The rial lost approximately 37% of its value against the US dollar in 2024, leading to capital flight, widespread dollarisation, and growing reliance on informal financial channels such as stablecoins. The Central Bank of Iran (CBI) responded by tightening monetary controls, closing rial-based crypto gateways, and imposing price caps on digital assets in an attempt to stabilise the currency and limit speculative outflows.

These measures were introduced against a broader backdrop of political and geopolitical instability. While Iran is not formally engaged in war, it remains trapped in a condition described by both private sector representatives and political leaders as “neither war nor peace”. This suspended state—driven by international sanctions, regional tensions, and uncertainty over future diplomatic or military developments—has paralysed long-term business planning and investment.

Go to link