Rising prices, falling currency: Iran’s economy faces rocky road
Iran’s currency has plunged from 34,000 rials/USD in 2016 to 430,000 in 2022 amid sanctions
Anadolu Agency
January 15, 2026
The Iranian rial has suffered a sharp and sustained decline, hitting record lows against the US dollar on the open market. PHOTO: 123rf.com
Iran’s economy is going through one of its most difficult periods in years, fueled by sanctions, high inflation, and a significant drop in the value of the national currency, the rial.
These pressures have had a direct impact on living standards and have also fueled recent protests.
The protests began on Dec. 28 in commercial hubs in the capital Tehran, when shopkeepers, merchants, and small business owners staged strikes and demonstrations to protest soaring inflation, the collapsing rial, and deteriorating economic conditions, and have since grown into nationwide anti-government expressions of discontent involving workers, students, and others across multiple cities.
The Iranian president said Sunday that his government is determined to address Iran’s economic problems amid the protests. Masoud Pezeshkian said the government admits to “shortcomings and problems” and is working hard to alleviate the people’s concerns, especially on the economy.
There are no official casualty figures from the protests, but the Human Rights Activists News Agency (HRANA), a US-based rights group, estimates that the death toll has reached 2,615, including both security forces and protesters, with 2,054 injured, and 18,470 arrested.
Currency collapse at center of crisis
The Iranian rial has suffered a sharp and sustained decline, hitting record lows against the US dollar on the open market. It started last year at around 817,000 rials per $1, then sank to 1.42-1.47 million rials on the parallel market by late 2025.
Due to the rial’s sharp decline, most Iranians have struggled to keep up with steadily rising prices.
The currency has been suffering for years in the face of sanctions and inflationary pressures, going from about 34,000 rials to the US dollar in 2016 to around 270,000 in 2021 and some 430,000 in 2022.
By 2023-2024, the rial had crossed the 750,000 mark on the open market, and its depreciation accelerated in 2025. Since 2020, the rial has lost nearly 800% of its value, and as of this week it trades at around 1.5 million rials to the dollar, severely eroding household purchasing power.
As the rial weakened, import costs shot up, feeding inflation and forcing businesses to raise prices. For ordinary Iranians, the falling currency has wiped out savings, reduced purchasing power, and created fear that prices will continue rising.
Traders and shopkeepers have been among the first to protest, as they struggle to afford goods amid daily currency swings.