29 Sept 2025
The text addresses widespread anxieties regarding currency devaluation and provides an analytical perspective on the Iranian economy and dollar valuation. It offers insights into systemic issues, government strategy, and actionable investment advice, advocating for a pragmatic approach over speculative predictions.
Public anxiety stems from currency devaluation, declining purchasing power, and an uncertain future. Financial markets are inherently unpredictable, requiring a strategy focused on psychological well-being and gradual asset accumulation rather than relying on forecasts.
A previous analysis, based on liquidity models, projected a 'fair rate' for the dollar at 67-68 thousand Toman for the current quarter. However, factoring in foreign policy and geopolitical risks, including Republican influence, the dollar's upper bound was estimated at 83-84 thousand Toman, a level it has now exceeded, trading around 87 thousand Toman.
The government possesses the capability and ample resources to control the dollar's price but has intentionally departed from past strategies, choosing not to deplete resources on rate suppression. This shift implies the government currently benefits from the higher dollar value and reserves the option to intervene at a later, undisclosed time.
Purchasing dollars at current high levels, around 87 thousand Toman, for profit offers an unfavorable risk-reward ratio. Investors should avoid being swayed by large nominal increases, as these represent smaller percentage gains on high values, potentially causing mental pressure without proportional financial returns.
Expectations of a substantial dollar crash, such as a 30-40% reduction, are unrealistic and should be disregarded. Even if minor corrections occur, they will not significantly alter the overall percentage value, thereby making deep buying opportunities improbable in the current economic climate.
The majority of economic pressure (80%) is attributed to internal systemic failures, including a lack of proper structure, pervasive inefficiency, and widespread institutional corruption. This environment fosters internal conflicts and impedes progress, rendering substantial economic growth impossible without fundamental structural reforms and decisive interventions. Although incremental improvements like banking credit reforms and tax digitization are noted, they lag decades behind global standards.
External factors account for approximately 20% of the economic pressure, largely due to the country's specific ideology and foreign policy stance. This restricts the potential for comprehensive, long-term international agreements or breakthroughs that could significantly devalue the dollar to much lower levels; any positive external events are likely to be superficial and temporary.
A 'hybrid Dollar-Cost Averaging (DCA)' strategy, combining both time-based and price-based approaches, is recommended for investors. This involves an initial 'first step' purchase for reassurance, followed by subsequent, calculated purchases at specific price points or regular intervals. Investors must also plan for potential upward movements, continuing to buy even at higher prices, as percentage changes remain manageable in the context of large nominal values.
Financial markets are inherently uncertain and unpredictable, necessitating a well-structured strategy for gradual wealth building and psychological resilience.
| Insight | Explanation | Recommendation |
|---|---|---|
| Financial Markets Philosophy | Markets are unpredictable; focus on strategic building rather than forecasts. | Implement a gradual asset-building strategy with psychological resilience. |
| Government Intervention Strategy | The government possesses power and resources but is strategically choosing not to suppress the dollar, benefiting from higher rates. | Do not rely on immediate or aggressive government intervention to lower the dollar's value. |
| Current Dollar Risk-Reward | Buying dollars at current high levels (e.g., 87,000 Toman) offers a poor risk-reward profile for immediate profit. | Avoid impulsive buying driven by large nominal numbers; evaluate true percentage gains carefully. |
| Unlikely Major Crash | A significant dollar crash (e.g., 30-40%) is not expected due to prevailing internal and external factors. | Dismiss expectations of deep price corrections for future buying opportunities. |
| Systemic Internal Problems | 80% of economic pressure stems from systemic corruption, lack of structure, and inefficiency. | Understand that meaningful progress requires deep structural reform, not quick fixes. |
| Investment Approach | A hybrid Dollar-Cost Averaging (DCA) strategy, combining time and price, is advised. | Make staged purchases and be prepared to buy at higher prices if the dollar continues to rise. |
