10 Pahlavī (Rezā Pahlavī) – Iran

In 1977, Iran's currency situation was characterized by relative stability and strength, but it existed within an economy showing signs of increasing strain under the final years of Mohammad Reza Pahlavi's rule. The Iranian rial was a strong, pegged currency, fixed at approximately 70.5 rials to the U.S. dollar, a rate maintained since 1957. This stability was underpinned by booming oil revenues, which had quintupled following the 1973 oil crisis, filling state coffers and financing massive industrialization and military modernization projects. The country enjoyed high foreign exchange reserves, low external debt, and a seemingly robust fiscal position, presenting an image of economic prosperity to the international community.

However, this superficial strength masked profound structural weaknesses and growing inflationary pressures. The Shah's ambitious "Great Civilization" development program, funded by petrodollars, had led to overheated economic growth, severe bottlenecks in infrastructure, and rampant government spending. This fueled an inflation rate estimated between 15-25% annually, which severely eroded the purchasing power of ordinary Iranians, especially in urban areas. While the rial's official peg remained firm, the real economy was experiencing distortions, with a growing disparity between the wealthy elite connected to the state and the rural poor, alongside a frustrated middle class facing a rising cost of living.

The currency stability, therefore, became increasingly detached from the socioeconomic realities on the ground. Public discontent over economic mismanagement, corruption, and perceived "Westoxification" was simmering, setting the stage for the political upheaval to come. The fixed exchange rate and high reserves provided a false sense of security, as the fundamental pressures of inflation, income inequality, and wasteful expenditure were weakening the economy's foundations. Within two years, the revolution would unleash a currency crisis, but in 1977, the rial stood as a potent symbol of a regime whose economic policies had created both impressive macro-indicators and deep-seated popular resentment.