Amir Kermani, an economist and professor at Berkeley University, examines the causes of the dollar's dominance over Iran's economy, as well as the policy mistakes of recent decades:
For decades, decision-makers in Iran have been very sensitive to the price of currency and have tried to reduce the "dominance of the dollar against the rial" in various ways.
The mistake that a politician made five decades ago is the same mistake that many countries made before the 2000s, and especially before the 1990s.
Politicians thought that inflation could be controlled by stabilizing the exchange rate and controlling prices, until they finally realized that the best way to sustainably control inflation was to create self-sufficiency in the nominal anchor.
Nominal anchor is a tool by which policymakers can converge economic agents' expectations of future inflation.
One of the most important consequences of having a domestic nominal anchor is that the inflation rate is much less affected by the exchange rate.
If someone approves an unbalanced budget or does not reform the banking system, they have no right to complain about the dollar overcoming inflation expectations.

Tehran Bazaar Information Network