IRAN'S currency plunged nearly 8 per cent to a new record low against the US dollar on Monday, but the dramatic drop was being suppressed within the country through censored mobile phone text services and some exchange websites.

One money changer said by telephone that the street rate was 26,400 rials to the US dollar, sharply lower than the 24,000 rate late on Sunday.

The Mehr news agency reported a rate of around 26,000.

"These prices cannot continue," central bank chief Mahmoud Bahmani was quoted as saying on the website of state broadcaster IRIB.

He added: "We have a plan to control the market and we will announce it very soon."

In the meantime, mobile telephone text messages that included the word "dollar" in English or in Farsi were being censored, with the message not being received. The Farsi word for "foreign money" was also blocked.

But text messages containing the words "USD", "euro" or the $ symbol were all transmitted and received normally.

Text blocks on the word "dollar" have been implemented before in Iran, on January 10, when the rial also dived precipitously. The country's two main mobile phone service providers, MCI and Irancell, claimed at the time they were not filtering messages.

Several Iranian websites that usually give real-time foreign exchange rates had the dollar rate blanked out.

One often consulted website, mesghal.ir, did give a dollar rate - but at 25,350 it was inexplicably lower than that reported by street money-changers.

Visitors to the money-exchanging district in central Tehran during Monday saw many of the normally bustling shops half-shuttered, and none displayed a rate for dollars in its window.

Monday's plunge deepened a sharp slide of 5 per cent recorded on Sunday.

Separate from the floating street exchange rate, Iran maintains a fixed official rate of 12,260 rials to the dollar, but that is reserved for the government and a few privileged businesses.

The rest of the country relies on the street rate, with the result that the price of imported goods have sharply risen in recent months.

The head of Iran's parliamentary budget commission, Gholam Reza Mesbahi-Moghadam, told the Fars news agency that "the government has committed its biggest historic mistake by not responding to the demands in the forex market".

He was quoted as saying that the US dollar's sharp rise was because the central bank "has not injected dollars (into the market) in the past three weeks".

Asked whether that was true, Mr Bahmani told IRIB that "we are still giving forex (dollars) for staple and necessary goods, but we're not giving forex to import sofas or dolls".

The rial has halved in value this year, compared to December 2011, as draconian Western economic sanctions have been imposed to punish Tehran over its disputed nuclear program.

"We are fighting an economic war with the world," Mr Bahmani told reporters on Sunday, the ISNA news agency reported.

Iranian authorities have tried several times in recent months to stop the currency's slide - even briefly at one point trying to impose a cap on the rate - but, after pauses or fleeting reversals, the rial has returned to shedding value.

Market uncertainty has been exacerbated by bellicose rhetoric from Israel, the Middle East's sole though undeclared nuclear weapons state, which has threatened air strikes against Iran's nuclear facilities.

Iran's authorities have vowed not to cede to the sanctions pressure, saying they will maintain their nuclear activities, which they insist are purely civilian in nature.

EU foreign ministers have said they are considering imposing further sanctions on Iran.

Originally published as Iran censors news of currency plunge