1.36 Million to One: Iran’s Rial Hits Record Low Amid Shrinking 2026 Budget
The Iranian rial has hit a record low of 1.36 million per dollar. With 50% inflation and a 2026 budget that raises taxes by 62% while capping wages, Iran faces a severe economic crunch.
It takes 1.36 million rials to buy just one US dollar. Reuters reported that Iran's currency plummeted to its lowest rate ever on December 24, 2025, as the nation struggles with crushing sanctions and the looming threat of regional conflict. The economic turmoil is now bleeding into the government's financial planning, revealing a grim future for the 90 million people living under Tehran's rule.
The Math of Inequality: Inflation vs. Wages
President Masoud Pezeshkian recently presented a budget for the upcoming year starting in late March. While the budget nominally grew by 5%, this figure is dwarfed by an inflation rate currently sitting at 50%. In reality, this is a severe austerity measure. To make matters worse, minimum wages are set to rise by only 20%, meaning Iranians are guaranteed to see their spending power evaporate.
To offset falling oil revenues due to US sanctions, the government plans to hike taxes by a massive 62%. At the current market rate, the entire national budget is worth roughly $106 billion—significantly less than the projected spending of regional neighbors like Saudi Arabia or Turkey.
Cosmetic Fixes and Price Shocks
In a move critics call purely cosmetic, the budget will remove four zeros from the currency. While this makes accounting easier, it does nothing to stop the rial's freefall. Furthermore, the government has abandoned the subsidized exchange rate for essential goods, sparking fears of a price shock for food and medicine.
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