Dollar Surge Triggers Iran's Currency Crisis

The Iranian rial's collapse has entered a new phase as the US dollar surges to new records, pushing up import costs and paralyzing markets. According to Dr. Mohammad-Hossein Tsouji, the professor of electronic engineering, the rising dollar is a measure of the rial's depreciation. The exchange rate has reached 228,000 tomans, an increase of approximately 40% in just three months.

The consequences are far-reaching and affect every part of the economy. As the rial loses value, imported goods become more expensive, creating a chain reaction that spreads through production costs, consumer prices, and purchasing power. This has led to a vicious cycle where currency depreciation fuels inflation, reducing demand and pushing businesses into economic paralysis.

The impact is particularly severe for food products, with price increases exceeding 30% when the exchange rate rises by just 20%. For ordinary Iranians, this means that basic necessities like food, medicine, and housing become unaffordable. Businesses are also affected, as they struggle to determine replacement costs and calculate future production expenses.

The government's response has been inflationary, creating more money in an already inflationary economy. This can further weaken the currency and accelerate price increases, deepening the crisis instead of resolving it.