Comprehensive Technical Comparison of National Currency Depreciation in Iran and Turkey against the US Dollar from 2012 to September 2026: Data-Driven Analysis, Structural Drivers, Inflation Impact on Purchasing Power, and Future Scenarios
National currency depreciation against the US dollar is one of the most important indicators of macroeconomic health in developing and emerging economies. From early 2012 (Persian year 1391) to September 2026, both Iran and Turkey experienced significant currency depreciation, yet the intensity, speed, pattern, and root causes differed substantially.
In Iran, the free-market dollar rate rose from approximately 1,800–3,700 tomans in 2012 to around 223,000–224,000 tomans in September 2026 (a cumulative factor of roughly 70–120 times depending on the exact starting point). In Turkey, the USD/TRY rate increased from an average of about 1.80 in 2012 to approximately 48.3 in September 2026 (a factor of roughly 27 times). This scale difference requires a detailed analysis of economic mechanisms, monetary policy, fiscal structure, sanctions, and geopolitical factors.
This article adopts a technical, data-driven approach to examine historical trends, structural drivers, the impact of inflation on household purchasing power, and plausible future scenarios. Iranian data are based on free-market rates (not official or NIMA rates), while Turkish data rely on market and international reference rates. Operational analysis draws on daily time series and econometric models (including GARCH for volatility and VECM for long-run relationships between liquidity, inflation, and the exchange rate).
Precise Historical and Comparative Exchange-Rate Data
To understand the scale of depreciation, we first review key historical points.
Table 1: Approximate Free-Market USD Rate in Iran (Tomans) and USD/TRY in Turkey
| Approximate Period | Iran (Free Market, Tomans) | Turkey (USD/TRY) | Iran Cumulative Factor from 2012 | Turkey Cumulative Factor from 2012 | Key Event |
|---|---|---|---|---|---|
| Early 2012 | ≈1,800–2,000 | ≈1.78–1.80 | 1 | 1 | Onset of broad sanctions |
| End of 2012 / 2012–13 | ≈3,500–3,700 | ≈1.78–1.85 | ≈1.8–2 | ≈1 | Peak oil & SWIFT sanctions |
| 2016–17 | ≈3,500–4,000 | ≈3.0–3.6 | ≈2 | ≈1.7–2 | JCPOA and relative stability in Iran |
| 2018 | ≈10,000–12,000 | ≈4.8–6.5 | ≈5–6 | ≈2.7–3.5 | US withdrawal from JCPOA + Lira crisis |
| 2020–21 | ≈25,000–30,000 | ≈7–13 | ≈12–15 | ≈4–7 | Maximum pressure + COVID |
| 2023–24 | ≈50,000–90,000 | ≈20–35 | ≈25–45 | ≈11–19 | Return to orthodox policy in Turkey |
| September 2026 | ≈223,000–224,000 | ≈48.3 | ≈75–120 | ≈27 | Intensified new pressures |
- Iranian rates refer to the free (street/parallel) market, which better reflects foreign-exchange shortages and inflationary expectations.
- Turkish rates are approximate averages or end-of-period figures from international references including Bank of England and Macrotrends.
- Factors are approximate and illustrate cumulative scale. Iran’s path has been primarily discontinuous and non-linear, while Turkey combined gradual trends with acute crisis episodes.
Liquidity Growth, Inflation, and Impact on Purchasing Power
One of the main transmission channels to the exchange rate is high liquidity (M2) growth. In Iran, average annual liquidity growth remained elevated throughout much of the period and showed a strong correlation with inflation and subsequently with the free-market exchange rate. VECM models fitted to the time series confirm that positive liquidity shocks transmit, with relatively short lags, into higher inflation and then pressure on the exchange rate.
In Turkey, liquidity growth during expansionary monetary-policy episodes (especially 2021–2023) also played a major role in fueling inflation and the lira’s collapse, although the relationship moderated somewhat after the return to orthodox policy.
Technically, the loss of purchasing power can be measured via the real consumer-price index compared with nominal wage growth. In both countries, wage growth lagged inflation in several sub-periods, increasing living-cost pressure.
Economic Mechanisms of Currency Depreciation
In Iran
The chronic multiple-exchange-rate system (official, NIMA, free market) has been one of the most important structural factors. Preferential foreign-exchange allocation created rents and shifted demand pressure onto the free market. High liquidity growth to finance the government budget deficit, without sufficient non-oil production and export backing, directly increased foreign-exchange demand. Heavy reliance on oil revenues and restricted access to the international payments system (SWIFT) meant that any disruption in oil exports immediately triggered exchange-rate jumps. Exchange-rate pass-through in Iran is very high and creates a feedback loop between the exchange rate and inflation.
In Turkey
Structural current-account deficits and dependence on short-term capital flows (hot money) have been the main vulnerabilities. During 2021 to mid-2023, unconventional monetary policy (interest-rate cuts despite rising inflation) triggered capital outflows, a sharp lira collapse, and higher inflation expectations. Tools such as FX-protected deposits (KKM) temporarily contained pressure but imposed heavy fiscal costs. After 2023, the return to orthodox policy slowed the pace of lira depreciation, although sticky inflation persisted. Pass-through remains high, yet better access to global financial markets has enabled capital inflows during relatively stable periods.
Political and Geopolitical Drivers
Iran
- 2012: Central-bank sanctions, SWIFT disconnection, and EU oil embargo → severe FX shortage and initial jump.
- 2015–2018: JCPOA and relative opening, followed by unilateral US withdrawal and maximum-pressure campaign → renewed collapse.
- 2020 onward: Intensified secondary sanctions, oil-sales restrictions, and regional tensions.
- 2024–2026: Escalated economic and military pressures linked to regional developments → new historic highs in the exchange rate.
Turkey
- 2013: Fed tapering and capital outflows from emerging markets.
- 2016: Failed coup attempt and state of emergency → elevated political risk.
- 2018: Tensions with the United States (Brunson case) and currency crisis.
- 2021–2023: Unconventional monetary policy under political pressure → sharp lira collapse and inflation near 85%.
- 2023 onward: Partial return to orthodox policy, yet continued domestic political risks and energy shocks from Middle-East developments.
The fundamental difference is that Iran has been more exposed to structural external shocks (sanctions), while Turkey has experienced a combination of domestic policy errors and political/geopolitical shocks. Turkey’s better access to the global financial system has allowed faster recovery capacity.
Quantitative and Qualitative Comparative Analysis
In terms of scale, Iran’s currency depreciation has been roughly 3 to 4 times more severe than Turkey’s. In terms of volatility, Iran has shown more frequent discontinuous jumps, while Turkey has experienced acute but more reversible volatility episodes. The correlation between liquidity growth and the exchange rate is high in both countries, yet stronger in Iran because of constrained FX supply. Inflation in both economies has been influenced by the exchange rate, but the effect on purchasing power has been more persistent in Iran due to higher import dependence and sanctions-related constraints.
Future Scenarios to the 2030 Horizon
Scenarios are constructed around three main axes: intensity of sanctions/external relations, quality of monetary and fiscal policy, and regional geopolitical shocks. They are calibrated using simulated paths from models fitted to the daily time series.
Iran
Continuation or intensification of sanctions + high liquidity growth + further geopolitical tensions. Free-market rate could reach the 350,000–500,000 toman range or higher. Chronic inflation above 50% and severe pressure on purchasing power.
Turkey
Return to unconventional monetary policy + severe energy or political shocks. USD/TRY could reach 65–80 or higher, with inflation reigniting.
Iran
Relative stability at current sanction levels + limited reactive FX management. Gradual rise of the rate toward 280,000–350,000 tomans. Continued inflation in the 30–45% range and gradual erosion of purchasing power.
Turkey
Continuation of current orthodox policy with political fluctuations. Gradual rise toward 55–65. Gradual decline of inflation toward lower double-digit levels.
Iran
Relative diplomatic opening or reduced sanction pressure + limited budget and banking reforms. Stabilization or milder growth in the 250,000–300,000 toman range and relative easing of pressure on purchasing power.
Turkey
Sustained political stability + successful structural reforms + improved external relations. Relative stabilization in the 50–58 range and more durable disinflation.
These scenarios are not deterministic and depend heavily on domestic policy decisions and external developments.
Conclusion and Policy Lessons
From 2012 to 2026, Iran experienced far more severe national-currency depreciation, rooted primarily in structural constraints on foreign-exchange access caused by sanctions, the multiple-rate system, and high liquidity growth. Despite acute monetary crises, Turkey recorded a smaller cumulative factor thanks to greater policy flexibility and better access to global markets.
The common lesson for both countries is that central-bank independence, fiscal discipline, control of liquidity growth, reduced reliance on volatile revenues, and expectation management play decisive roles in exchange-rate stability and preservation of purchasing power. Under current conditions, the quality of domestic policy can make a meaningful difference to the future path.
Primary Sources and References
- Iran free-market historical data: Central Bank reports, TGJU archives, Bonbast, and daily archive GitHub – rial-exchange-rates-archive
- USD/TRY data: Bank of England, Macrotrends, Exchange-Rates.org, Central Bank of Turkey, and international time-series sources
- Structural analysis: Reports from the International Monetary Fund (IMF), World Bank, and research papers on sanctions, Turkey’s unconventional monetary policy, and exchange-rate pass-through
This article is purely analytical and educational and does not constitute investment advice or a basis for financial decision-making.