IRR - Iranian Rial

Overview of the Iranian Rial (IRR)

The Iranian Rial is the official currency of Iran, commonly referred to as IRR. The Rial has a long history, appearing in the 18th century but only becoming the official currency in 1932. 

Although the Rial is the official currency, in daily life, Iranians use Toman for transactions. One Toman equals 10,000 Rials.

The rial has been negatively affected by high inflation and an unstable economic situation, especially under the pressure of international sanctions. This has caused the value of the rial to plummet severely compared to other currencies, making it one of the fastest depreciating currencies.

Currently, the Iranian Rial is in circulation in both coin and paper form with different denominations. 

• Circulating coins are in denominations of 50, 100, 250, 500, 1,000, 2,000, and 5,000 rials. The 5 and 10 rial coins are no longer being issued.

• Banknotes are available in denominations of 5,000, 10,000, 20,000, 50,000, and 100,000 rials. The payment notes are in denominations of 500,000 and 1,000,000 rials.

On September 23, 2018, 1 US dollar was exchanged for 42,080 Iranian rials.

Iranian Rial (IRR) History

The Iranian Rial has been the official currency of the Islamic Republic of Iran since 1932. The Rial was introduced to replace the previous Toman. The introduction of this currency marked the transition to a new monetary system in the context of economic modernization under Shah Reza Pahlavi. 

Initially, the Iranian Rial was highly valued and equivalent to 1.25 USD, but due to numerous economic and political upheavals, the value of the Rial has significantly decreased.

The Iranian Rial is issued and managed by the Central Bank of Iran. (CBI). This is also the agency that implements many monetary policies to maintain the stability of the Rial and manage inflation. 

In addition, the Iranian government frequently adjusts the currency value to cope with economic pressures both domestically and internationally.

The currencies that have been in circulation in Iran

In Iran, various currencies have been in circulation, such as:

• Drachma: One of the earliest currencies of Iran used during the Achaemenid Persian Empire (559-330 TCN)

• Dinar: The currency used during the Islamic period after the Arab conquest of Iran in the 7th century. The dinar had a significant influence on the Middle East and was used for many centuries. 

• Qiran: The currency of Iran used in the 19th and early 20th centuries.

• Toman: One of the common currency units in circulation in Iran from the 19th century to the present, with an exchange rate of 1 Toman = 10 Qiran. 

• Rial: Introduced for the first time in 1798 and then reintroduced in 1932, replacing the Toman. However, the people of Iran still commonly use the Toman as an unofficial currency, with an exchange rate of 1 Toman = 10,000 new Rials (after 2020).

Some key and notable events about the Iranian Rial (IRR)

The Iranian Rial has gone through several major events such as:

• In 1932: The Iranian Rial was officially introduced to replace the Toman. The initial exchange rate was 1 Toman = 10 Rials. 

• In 1979: The Islamic Revolution, the government of Shah Reza Pahlavi was overthrown, and the country of Iran experienced economic instability, causing the value of the Iranian Rial to plummet severely due to international sanctions as well as domestic upheavals. 

• From 2000 to now: The Iranian currency has faced inflation as well as the continuous depreciation of the Rial, especially after the sanctions related to the nuclear program. The government has repeatedly discussed converting the Rial currency to Toman in order to control inflation, with an exchange rate of 1 Toman = 10,000 new Rials.

Iranian Rial (IRR) exchange rate

Currently, Iran is implementing a dual exchange rate system to cope with economic pressures, especially international sanctions and high inflation, including:

Official exchange rate: The Central Bank of Iran manages a fixed exchange rate used for important government transactions, including the import of essential goods, medicines, and production materials.

Official exchange rate: Iran establishes a free exchange rate formed in the unofficial market. This exchange rate reflects the actual supply and demand of the market and is often significantly higher than the official rate due to the devaluation of the Rial over time, economic sanctions, and high inflation.

The free market exchange rate is applied in most international trade transactions not covered by government protection, such as personal transactions, foreign currency exchanges, and the import of non-essential goods.