The gradual decline of silver and its impact on the monetary crisis of Iranian governments (lasted until the 5th century)

Author

Assistant Professor, Department of History, Faculty of Humanities and Social Studies, Farhangian University, Tehran, Iran.

Abstract

This study investigates the causes behind the gradual decline of silver coinage (dirhams) and its consequences for the financial crises in Iranian polities up to the 5th/11th century. Focusing on three key factors mining operations, international trade, and military conquests- demonstrates how the widespread outflow of silver from Iran's monetary circulation ultimately led to the collapse of its economic system. The central research question is: What factors contributed to the gradual depletion of silver reserves and the emergence of inflation and financial crises in Iranian governments? Using an analytical-comparative method and drawing upon historical sources, this study cross-examines its findings with numismatic evidence and contemporary data analysis. The findings reveal that overexploitation of silver mines in Transoxiana and the outward flow of dirhams -particularly during the Samanid period, when they were exchanged for luxury goods such as furs and slaves- significantly depleted the domestic silver supply. This compelled ruler to adopt ineffective monetary policies, including the debasement of the dirham through reduced weight and fineness, and the minting of alloyed coins. These practices resulted in the devaluation of the dirham and the proliferation of counterfeit currency. While the Ghaznavid conquests temporarily restored the quality of dirhams, the overall trend of silver depletion persisted. Continued outflows forced the Buyids to rely increasingly on the iqṭāʿ system (a return to a barter-based economy) and to mint gold dinars instead; however, this shift further exacerbated existing fiscal disarray.

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References

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  • Receive Date: 29 April 2025
  • Revise Date: 11 July 2025
  • Accept Date: 20 July 2025

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