On January 31, 2025, Iran's Parliament is set to vote on a bill aimed at renewing currency reform efforts, which have stalled under previous administrations. The proposed changes seek to replace the rial with the toman, a move initially introduced in 2016 and launched in 2021, intended to simplify transactions and curb inflation.
Despite these efforts, the economic situation remains dire, with inflation continuing to erode public confidence. Since the reimposition of U.S. sanctions in 2018, the rial has lost over 80% of its value against the dollar, exacerbating hyperinflation and significantly increasing the cost of essential goods.
Many citizens, like Tehran shopkeeper Farshid, report spending a substantial portion of their salaries on groceries, highlighting the disconnect between currency reform and the realities of daily life. Economic experts emphasize that merely changing the currency will not address fundamental economic issues such as inflation, unemployment, and liquidity.
Historical precedents from countries like Germany, Turkey, and Brazil illustrate that successful currency reforms typically require comprehensive fiscal measures and structural changes. In contrast, efforts in Zimbabwe and Venezuela have shown that without addressing underlying political and economic instability, currency changes can lead to further economic decline.
Frustration among the Iranian populace is growing, with a recent survey indicating that 75% believe the currency reform has failed to improve their economic conditions. Many young, educated individuals are leaving the country in search of better opportunities, contributing to a significant brain drain.
Experts argue that Iran must pursue systemic reforms beyond currency adjustments, such as diversifying the economy and enhancing transparency. Additionally, easing sanctions through diplomatic negotiations could provide a pathway toward economic stabilization.