Iran's bazaar merchants squeezed as rial hits record low

Iran's bazaar merchants are suffering as the rial plunges to a record low, causing a decline in consumer demand and rising costs. The currency's weakness has led to unusually quiet lanes at Tehran's Grand Bazaar, with shopkeepers reporting minimal foot traffic even before the new school year. Merchants are forced to cut margins to attract customers, but this has become less about sales and more about keeping the business running.

Across Iran, traders face the same dilemma, as prices skyrocket while household purchasing power disintegrates. Some merchants struggle with rising rents, with businesses increasingly being forced to abandon their shops in Tehran due to unaffordable costs. Outside the capital, shopkeepers in Shiraz report rent increases, reaching 320 million rials ($160) from 180 million rials.

The US sanctions, which have expanded to include new individuals, companies, and sectors, exacerbate the economic crisis. Merchants worry that sanctions could make imported goods significantly more expensive, while some compare Washington's pressure to a bully telling someone they can no longer eat what they want. The rial's rapid depreciation has led to higher costs for imported goods and reduced consumers' ability to afford them.

The cumulative effect of years of inflation, currency depreciation, and falling living standards, all blamed on economic mismanagement, has created a vicious cycle, with consumers buying less, merchants cutting profits, and businesses struggling to sustain themselves.