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

Meanwhile, the 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 introduced its toughest sanctions yet in efforts to strangle Tehran's economy.

Key points

• The government-approved minimum wage for the current Iranian calendar year ending in March 2027 is 166 million rials ($82).
• The US-Israel war on Iran, introduced on February 28, worsened the economic woes for the country of some 92 million residents.
• Afsaneh*, a 35-year-old mother of a one-year-old who lives with her husband in Tehran, notes her family's weekly grocery bill has climbed by 20 to 30 percent.
• 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.
• Before the war, 2 million rials could purchase concerning 4kg of tomatoes, half a kilo of chicken and a little less than a litre of cooking oil.

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 individuals. The US-Israel war on Iran, introduced on February 28, worsened the economic woes for the country of some 92 million residents.

To understand how much everyday items now cost, Al Jazeera tracked the rates 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?

Today, the same amount buys regarding half as much, with the average rate of tomatoes increasing by 71 percent, chicken by 74 percent and cooking oil by 177 percent.

While essential medicine like paracetamol has become dearer by 93 percent, and baby formula, largely subsidised by the administration, has become costlier by 95 percent, the cost of insulin, the baseline survival for diabetics, has shot up by 642 percent.

Meanwhile, the graphic below breaks down the average costs of food, clothing and medicine before the war and on Wednesday. Rates 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 purchase, but additionally what they eat.

"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 informed 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. It is tough for us to afford."

Toman is the term Iranians employ for the rial as an unofficial unit equal to 10 Iranian rials, widely employed since it makes the country's substantial currency figures easier to manage.

For context, the administration subsidy on baby formula helps families like Afsaneh's, but their monthly wellness checkups and nutritional supplements are not covered by insurance, making it challenging to afford quality care for their infant.

For Afsaneh, their small family is limited to survival and covering food and other necessities. "Plenty of purchases, such as new clothes or upgrading our car, have been cut from our aims. And I don't think things are going to obtain better anytime shortly, " she noted. 'Everything has become more expensive'.

While a US naval blockade of Iranian ports has complicated imports and exports, war damage has disrupted production.

While the falling rial has pushed up the cost of goods, sanctions have restricted Iran's access to international markets. Meanwhile, wages have failed to keep pace.

Meanwhile, the government-approved minimum wage for the current Iranian calendar year ending in March 2027 is 166 million rials ($82). With administration 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, informed 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 notes.

"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 notes numerous retailers are selling their summer stock below cost, and in the autumn this new wave of cost increases will be reflected in retail stores.

"From the moment you leave your house until you obtain back home, you spend at least 2 million tomans 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 a day, and that doesn't include regular groceries and household necessities, " Zamir remarked. Widening gap between income and expenditure.

For those living on salaries, inflation creates another difficulty: the value of today's pay can fall before the next payday.

For her, the rising cost of groceries has had a major impact.

"We used to do our weekly grocery shopping for around 500, 000 tomans, but now we have to spend at least 5 million tomans for the same groceries, and we've had to cut back on things like meat and chicken or eliminate them altogether."

Salama* notes her income, instead of increasing, has actually declined, 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, and even a simple visit to a general practitioner costs no less than 1 million tomans, " she notes.

In practice, the war did not create Iran's economic challenges, but it has magnified them. While unemployment and stagnant purchasing power have reduced families' ability to absorb them, war damage, disrupted production and the blockade have continued new pressures.

For millions of Iranians, the question is no longer how much rates have risen, but how much of a month's food, housing and necessities a month's salary can still purchase. *Names have been changed to protect identities.

In short, one US dollar now costs 2 million rials in Iran, and here's is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.