One US dollar now costs 2 million rials in Iran, and here’s what it can buy

EXPLAINERSanctions and the Iran" class="entity-link entity-event" data-entity-id="38678" data-entity-type="event">US-Israel war on Iran have left the country’s people unable to keep pace with rising prices as the rial hits a new all-time low.Published On 26 Aug 2026The Iranian rial has fallen to a new all-time low against the US dollar, dropping past 2 million rials to $1 on the free market after Washington launched its toughest sanctions yet in efforts to strangle Tehran’s economy.Iran’s economy has been crippled by decades of US and international sanctions, especially over its nuclear programme – the Iranian rial has crashed and inflation woes are piling up misery for people. The Iran" class="entity-link entity-event" data-entity-id="38678" data-entity-type="event">US-Israel war on Iran, launched on February 28, worsened the economic woes for the country of some 92 million people.Recommended Stories list of 4 itemslist 1 of 4New US sanctions signal Trump desperation on Iran, experts saylist 2 of 4Iran bets economic pain will pressure Trump in game of ‘chicken’list 3 of 4Iran, Oman agree on new temporary route in Hormuzlist 4 of 4Trump threatens Iran’s partners: How do secondary sanctions work?end of listTo understand how much everyday items now cost, Al Jazeera tracked the prices of food, clothing and medicines on the streets of Tehran, comparing them with what the same goods cost in the days before the war.How much do basic necessities cost in Iran?Before the war, 2 million rials could buy about 4kg of tomatoes, half a kilo of chicken and a little less than a litre of cooking oil.Today, the same amount buys about half as much, with the average price of tomatoes increasing by 71 percent, chicken by 74 percent and cooking oil by 177 percent.The price of insulin, the baseline survival for diabetics, has shot up by 642 percent, while essential medicine like paracetamol has become dearer by 93 percent, and baby formula, largely subsidised by the government, has become costlier by 95 percent.The graphic below breaks down the average costs of food, clothing and medicine before the war and on Wednesday. Prices remain highly volatile, and the figures reflect average values.‘Our only concern is making it to the end of the month with the income we have’For Iranian families, this has meant changing not only how much they buy, but also what they eat.Afsaneh*, a 35-year-old mother of a one-year-old who lives with her husband in Tehran, says her family’s weekly grocery bill has increased by 20 to 30 percent.“Before the war, we could think about what we wanted to do three or six months down the road, but now our only concern is making it to the end of the month with the income we have,” Afsaneh told Al Jazeera.“My husband and I both work, and we have a one-year-old child. The daily cost of childcare at daycare centres has now reached around 500,000 tomans [5 million rials or $2.5], which is difficult for us to afford.”Toman is the term Iranians use for the rial as an unofficial unit equal to 10 Iranian rials, widely used because it makes the country’s large currency figures easier to manage.The government subsidy on baby formula helps families like Afsaneh’s, but their monthly wellness checkups and nutritional supplements are not covered by insurance, making it difficult to afford quality care for their infant.For Afsaneh, their small family is limited to survival and covering food and other necessities. “Many purchases, such as new clothes or upgrading our car, have been cut from our plans. And I don’t think things are going to get better anytime soon,” she said.‘Everything has become more expensive’War damage has disrupted production, while a US naval blockade of Iranian ports has complicated imports and exports.While the falling rial has pushed up the cost of goods, sanctions have restricted Iran’s access to international markets. At the same time, wages have failed to keep pace.The government-approved minimum wage for the current Iranian calendar year ending in March 2027 is 166 million rials ($82). With government assistance and benefits, the figure comes to less than 220 million rials ($108).Zamir*, a 35-year-old man from Tehran who works in men’s retail fashion, told Al Jazeera that sales have dropped by 40 percent compared with last year, and he is struggling to keep his business running.“I can say that it is completely predictable that many of the people working in this market will go bankrupt before the end of winter and will have no choice but to shut down their businesses,” he says.“Everything has become more expensive,” Zamir explains. “Workers’ wages, the cost of raw materials, and just about anything else you can think of have gone up.”He says many retailers are selling their summer stock below cost, and in the autumn this new wave of price increases will be reflected in retail stores.“From the moment you leave your house until you get back home, you spend at least 2 million tomans [$10] on things like coffee, cigarettes, water, and transport. Even if you are extremely careful with your spending, you still have to spend at least 700,000 to 800,000 tomans [$3.5-4] a day, and that doesn’t include regular groceries and household necessities,” Zamir said.For those living on salaries, inflation creates another problem: the value of today’s pay can fall before the next payday.Salama*, 28, is a mother of one who works as a fisher in Hormozgan, Iran’s southern coastal province, overseeing the strategically vital Strait of Hormuz.For her, the rising cost of groceries has had a big impact.“We used to do our weekly grocery shopping for around 500,000 tomans [$2.5], but now we have to spend at least 5 million tomans [$25] for the same groceries, and we’ve had to cut back on things like meat and chicken or eliminate them altogether.”Salama* says her income, instead of increasing, has actually decreased, forcing her to limit expenses severely.“Even a simple cold medicine for children or seasonal allergy medication, including Iranian brands, now costs around 300,000 tomans [$1.5], and even a simple visit to a general practitioner costs no less than 1 million tomans [$5],” she says.The war did not create Iran’s economic problems, but it has magnified them. War damage, disrupted production and the blockade have added new pressures, while unemployment and stagnant purchasing power have reduced families’ ability to absorb them.For millions of Iranians, the question is no longer how much prices have risen, but how much of a month’s food, housing and necessities a month’s salary can still buy.*Names have been changed to protect identities.