Why People Buy Dollars

In an economy experiencing high inflation, holding domestic currency can become increasingly unattractive.

If someone believes that the toman will lose value over time, they may attempt to protect their savings by purchasing assets denominated in currencies they perceive as more stable.

The U.S. dollar is one of the most important examples.

The dollar can function as:

• a savings vehicle;
• a hedge against inflation;
• a medium for international transactions;
• a reference price for certain goods;
• and a psychological benchmark for economic confidence.

This does not necessarily mean that every Iranian who buys dollars expects an immediate crisis.

Many people simply want to preserve the purchasing power of their savings.

That behavior itself can contribute to currency pressure.