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US Treasury Secretary Scott Bessent has claimed that Washington engineered a dollar shortage in Iran to send the rial into freefall and cause protests on the streets.

In December and January, Iran was faced with one of the biggest antigovernment protests the country has seen since the Islamic revolution of 1979, prompted by the severe economic crisis.

Protests over soaring prices in Iran began with shopkeepers in Tehran who shuttered their shops and began demonstrating on December 28, 2025, after the rial plunged to a record low against the US dollar in late December. The protests then spread to other provinces of Iran.

Supreme Leader Ayatollah Ali Khamenei’s government responded with force. More than 6,800 protesters, including at least 150 children, are thought to have been killed in a sweeping crackdown by the government on the protest movement.

So, how did Washington create a “dollar shortage” in Iran, ultimately causing the rial to tank? And what effect has that had on the Iranian people?

What is a ‘dollar shortage’?

A “dollar shortage” refers to when a country does not have enough US dollars to pay for things it needs from the rest of the world.

The US dollar is the main currency used in global trade, especially for oil, machinery and loan repayments, which means countries need a steady supply of it.

If exports fall and sanctions block access to the US financial system, dollars can become scarce. As a result, the local currency weakens, prices of imported goods rise, and inflation worsens.

In Iran, a “dollar shortage” was engineered by simultaneously blocking the two main channels of foreign exchange (FX) inflow: Oil exports and international banking access, said Mohammad Reza Farzanegan, an economist at Germany’s Marburg University. The US did this by imposing sanctions on Iranian oil, meaning anyone buying or selling it would be subject to punitive measures.

Given Iran’s dependence on oil for revenue, economic sanctions on its oil can create a severe FX constraint.

“By using secondary sanctions to threaten any global entity trading in dollars with Iran, the US traps Iran’s existing reserves abroad and prevents new dollars from entering the domestic market,” Farzanegan told Al Jazeera.

What has US Treasury Secretary Scott Bessent said?

Replying to a query about dealing with Iran at a Congressional hearing last week, Treasury Secretary Bessent described the US strategy to send the Iranian currency plunging.

“What we [have done] at Treasury is created a dollar shortage in the country,” Bessent said, adding that the strategy came to a “grand culmination in December, when one of the largest banks in Iran went under … the Iranian currency went into freefall, inflation exploded, and hence, we have seen the Iranian people out on the street.

“We have seen the Iranian leadership wiring money out of the country like crazy,” Bessent added. “So the rats are leaving the ship, and that is a good sign that they know the end may be near.”

Before this, speaking with Fox News at the World Economic Forum last month in Davos, Bessent explained the role US sanctions played in driving the recent nationwide protests.

“President Trump ordered Treasury … to put maximum pressure on Iran, and it’s worked,” he said. “Because in December, their economy collapsed. They are not able to get imports, and this is why the people took to the streets.”

In both instances, Bessent referred to his earlier remarks at the Economic Club of New York, in March last year, when he outlined how the White House would leverage President Donald Trump’s “maximum pressure” campaign to collapse Iran’s economy.

In his address there, Bessent said the US “elevated a sanctions campaign against [Iran’s] export infrastructure, targeting all stages of Iran’s oil supply chain”, coupled with “vigorous government engagement and private sector outreach” to “close off Iran’s access to the international financial system”.

What effect did the dollar shortage have in Iran?

In January, the Iranian rial was trading at 1.5 million to the dollar – a sharp decline from about 700,000 a year earlier in January 2025 and about 900,000 in mid-2025. The plummeting currency triggered steep inflation, with food prices an average of 72 percent higher than last year.

In 2018, during his first presidency, Trump withdrew from the 2015 Joint Comprehensive Plan of Action, a deal between Iran and global powers limiting Tehran’s nuclear programme in return for sanctions relief.

Since re-election last January, President Trump has doubled down on his so-called “maximum pressure” to cripple Iran’s economy and corner Tehran to renegotiate its nuclear and regional policies. Last month, Trump threatened a 25 percent tariff on countries doing business with Iran.

Through the rigorous blocking of Iran from the global financial system by creating a dollar shortage, the US pushed Tehran towards a severe “import compression, [and as a result, Iran] cannot pay for the intermediate goods and machinery required for domestic production”, said Farzanegan, the economist.

The US strategy, he said, “is particularly devastating because it leverages commercial risk management against humanitarian needs”. In short, Washington’s strategy “makes the small Iranian market a commercial liability” for any company, even if they are only dealing with medicine, for instance, Farzanegan added.

A research paper published by Farzanegan and Iranian American economist Nader Habibi last year found that the size of Iran’s middle class would have expanded by an annual average of approximately 17 percentage points, between 2012 and 2019, if it were not for US action.

In 2019, the estimated size of loss in the middle-class share of the population in Iran was 28 percentage points, the research found.

“People lost their purchasing power, and savings were wiped out,” the economist told Al Jazeera. “This is a long-term destruction of the country’s human capital.”

Besides the US action is the existing vulnerability of Iran’s economic structure, with factors like long-term mismanagement, high rates of corruption and over-reliance on oil revenues making it fragile.

While the US sanctions created external shock, a lack of domestic structural reforms left the government with “no fiscal space to cushion the blow”.

What is the US’s endgame here – and will it succeed?

Bessent’s admission that Washington deliberately created a “dollar shortage” signals the US’s shift towards a total economic warfare narrative.

“This is economic statecraft; no shots fired,” Bessent said at the WEF in Davos last month.

“This admission may complicate the US’s diplomatic standing, as it confirms that the humanitarian channels for food and medicine are often rendered useless if the entire banking system is being targeted for collapse,” Farzanegan said.

Bruce Fein, a former US associate deputy attorney general who specialises in constitutional and international law, told Al Jazeera that this type of economic coercion is “as common as the sun rising in the east and setting in the west”, pointing to economic sanctions against Russia, Cuba, North Korea, China and Myanmar.

However, unlike in other cases where the US has applied economic pressure, Farzanegan said Iran’s case is “a unique experiment due to the duration and intensity of the pressure”.

Unlike Russia, which has a more diversified export base and larger reserves, Iran has been facing varied forms of sanctions for decades since the supreme leader took power in 1979.

“Iran has a sophisticated internal mechanism for sanctions circumvention that makes the ‘dollar shortage’ a game of cat-and-mouse rather than a one-time shock,” the economist said.

With a US armada currently stationed in the Arabian Sea, the US and Iran are in talks to defuse tensions. The US wants three key things from Iran: To stop enriching uranium as part of its nuclear programme, to get rid of its ballistic missiles and to stop arming non-state actors in the region.

Ultimately, observers say, the US wants regime change in Iran.

But Fein said his experience shows that economic sanctions alone “seldom, if ever, topple regimes … Regime change comes externally only with the use of military force.

“Iran’s dollar shortage will not oust the mullahs or Revolutionary Guard,” he said, referring to Iran’s current administrative structure.

The impoverishment of Iranians will diminish, Fein told Al Jazeera, “rather than promote the likelihood of a successful revolution because day-to-day survival will be the priority”.

Source: https://www.google.com/amp/s/www.aljazeera.com/amp/economy/2026/2/13/us-says-it-caused-dollar-shortage-to-trigger-iran-protests-what-that-means

Why other nations are now learning knowing the USD can be weaponized.

Did he also answer why the USD is on a free fall and 4 year low?

Now you created a shortage because of Iran which still slumped the USD. That means, if you print more at this point, it will be a wreck.

Two governments of two different nations have problems and one created massive issues for the other which led to deaths...

#Killers vs #Murderers

That's people who knows economic

Another story for front page!
Wetin carry dis people matter come here?
Come, wey you, Admin, make una dey put our matter way make sense for this headline abeg!

Must the World be dependent on the American Dollar?

They shout death to America everyday and then expect the USA to help them..

Iran can run to allah or whoever is their friend for help.

Only brainless Islamists want to fight you and the expect you to be helping them everyday ..

Well, now you see what we have been talking about the USA.

They deliberately destroy a country while blaming people they don't like, making them take the fall in the eyes of their citizens.

This is a lesson for Nigeria.

They failed in Iran because the Iranian regime was miles ahead of them.

That is the way negotiation are done, its a healthy practice and more sanctions should be made to force Khamenei out of power. The Iranians are tired of a dictatorship regime

The USA is also responsible for the free fall of the naira during Buhari Regime. Very wicked and satanic lots.

Freshandfitpod:
That is the way negotiation are done, its a healthy practice and more sanctions should be made to force Khamenei out of power. The Iranians are tired of a dictatorship regime

Force him out of power for what reason exactly ??

The US is a terrorist country.

HacheNoire:
Why other nations are now learning knowing the USD can be weaponized.

Did he also answer why the USD is on a free fall and 4 year low?

Now you created a shortage because of Iran which still slumped the USD. That means, if you print more at this point, it will be a wreck.

All these Tinubu boys that lack simple comprehension.

USA didn't create dollar shortage by not printing dollars. It restricted fx inflow into Iran.

Basically, you inflicted pain on the people of Iran as your country has been doing before many Nairalanders were born. And when the effects of your evil act hit Iranians harder, you wanted to go in to save them by toppling their government, claiming that they're killing their own people protesting.
USA/Trump will just end up creating another shit hole in addition to the ones USA had already created which are the likes of Libya, Iraq, Afghanistan, Syria, Palestine, etc

WriteerNg:
This is why the world must abandon the US dollars and use their own national currencies for trade.

It absolutely makes no sense using another country's currency to settle your own trade internationally.

You're giving the US an unfair advantage over you.

You know nothing about international trade.

jmoore:
All these Tinubu boys that lack simple comprehension.

USA didn't create dollar shortage by not printing dollars. It restricted fx inflow into Iran.

So what has that go to do with Tinubu s boys? Tinubu is living rent free in your head.

jmoore:
You know nothing about international trade.

What he suggested is already happening, visit reddit once in a while and update yourself

HacheNoire:
Why other nations are now learning knowing the USD can be weaponized.

Did he also answer why the USD is on a free fall and 4 year low?

Now you created a shortage because of Iran which still slumped the USD. That means, if you print more at this point, it will be a wreck.

You go just open mouth dey talk nonsense every time.

Dodoyo dey dance... Keep lying to urself

HacheNoire:
Why other nations are now learning knowing the USD can be weaponized.

Did he also answer why the USD is on a free fall and 4 year low?

Now you created a shortage because of Iran which still slumped the USD. That means, if you print more at this point, it will be a wreck.

Stop the story, attack and feel the shame in stock.

The United States Treasury Secretary (minister of finance) explains how they attacked the Iranian economy and how that led to the riots in December.

(The US did the same to Zimbabwe in the 2000s).


https://www.tiktok.com/video/7604782156295965963?

They kept trying, they kept failing.
Since 1979

Nothing new ...weaponizing the dollar ..did same with Zimbabwe ....did same with Venezuela ... now Iran. The difference is the previous governments never mentioned it .... one of their dirty little secrets .. but this government is bragging about it. Same was tried with Russia ...and Russia did what Gadaffi attempted to do ... moved away from the dollar as the global trade currency and demanded payment in their own currency. That lead to the formation of BRICS ... the major countries are now trading in their own currencies and other countries ...seeing how the US can jse the dollar against them ... have been joining BRICS. What's the repercussions of this chest beating? Iran will use it to let their citizens realize who was really behind the hardships and scarcity. Irwnians will now really see the US as an enemy. Iran will stay clear of the dollar .. and the hat will happen to the US?....the dollar will be left isolated . Already the dollar is in a constant slump ...thanks to these brilliant billionaires.

Ewedegubbler:
They shout death to America everyday and then expect the USA to help them..

Iran can run to allah or whoever is their friend for help.

Only brainless Islamists want to fight you and the expect you to be helping them everyday ..

you lack understanding chai i shame for u

maasoap:
Basically, you inflicted pain on the people of Iran as your country has been doing before many Nairalanders were born. And when the effects of your evil act hit Iranians harder, you wanted to go in to save them by toppling their government, claiming that they're killing their own people protesting.
USA/Trump will just end up creating another shit hole in addition to the ones USA had already created which are the likes of Libya, Iraq, Afghanistan, Syria, Palestine, etc

Won't be easy with Iran though. Those guyz are smart

Obi will say he got the advice from you know....

You will hear from Persia in due course.

Strategic alliance between the Kurdish people and the Persians in the offing. Both have been victims of western plots

HacheNoire:
Why other nations are now learning knowing the USD can be weaponized.

Did he also answer why the USD is on a free fall and 4 year low?

Now you created a shortage because of Iran which still slumped the USD. That means, if you print more at this point, it will be a wreck.

Why is Tinubu not achieving his short term goal of N300/$1 despite the free fall of the dollar?

What is holding city boy from his own goal, 33 months after hitting the ground running cluelessly like a headless pig 🐖?

He saved $84 billion from subsidy removal which caused petrol to be expensive and life unaffordable.
He borrowed $3.3 billion from Afreximbank to defend the naira, using SPV future oil revenues through Elumelu’s UBA at an outrageous 11.85%.

Do you know what Jagaban is doing with all our money apart from stealing it to bribe politicians and buy votes in 2027

Watery excuse..

Dollar is not doing well & that’s it..