Since the 2026 escalation, the Central Bank of Iran has shifted from a conventional monetary authority into a tool for wartime survival, after US and EU sanctions cut Iranian banks off from global correspondent banking and SWIFT. Foreign reserves have been frozen for billions, and the central bank largely operates within a closed domestic system. To curb capital flight and hyperinflation, authorities have imposed strict controls, forcing exporters to convert foreign currency at suppressed rates and rationing FX for importers. Domestic banks now monitor transactions mainly to enforce state limits and stop unauthorized FX trading and smuggling of gold and precious stones, rather than to meet international AML standards. Ordinary citizens bear the brunt: purchasing power has collapsed, savings yield deeply negative real returns, essential imports are scarce, and many turn to hawala networks and crypto.
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