Key Highlights on the Iranian Rial (IRR)
- The Iranian Rial (IRR) serves as the national currency of Iran.
- Horizontal bands: exchange rate stabilized at around 42,000 IRR per U.S. dollar starting April 2018.
- Iran’s economy is largely driven by petroleum exports; however, sanctions over its nuclear program hinder economic growth.
- The IRR is often classified as a blocked or inconvertible currency because it isn’t freely traded in global markets.
- There have been discussions to replace the Rial with the Toman, though no change has occurred as of 2023.
The Foundation of the Iranian Rial (IRR)
One Iranian Rial is equal to 100 dinars, although dinars have negligible practical use. The Rial symbol locally is ﷼. As of December 2023, one U.S. dollar is approximately equivalent to 42,023 IRR.
The Rial was first introduced in 1798, replaced temporarily by the “qiran” from 1825 to 1932. It was reintroduced in 1932 but its value experienced a significant decline post the 1979 Islamic revolution.
Key judicial player in the Gulf, Iran, holds a strong position within the OPEC group, primarily banking on oil sales for governmental proceeds. Current circulating banknote denominations include 100, 200, 500, 1,000, 2,000, 5,000, 10,000, 20,000, 50,000, and 100,000 rials. Coin denominations available range through 50, 100, 250, 500, 1,000, 2,000, and 5,000 rials.
Iran’s currency regime isn’t pegged directly to any other currency but maintains internal economic stability through Central Bank controls while exploring frameworks for cryptocurrency including Bitcoin regulations.
Navigating the Iranian Rial (IRR) Convertibility
Since the early 2000s, the IRR’s exchange rate oscillated between 1,750 IRR and as high as 44,070 IRR per U.S. Dollar. Economic sanctions against Iran, meant to curb ambitions, currency trading with USD becomes constraint-laden. Factors like subsidies and price caps diminish IRR’s international exchange frequency, branding it as non-convertible in broader terms, impacting Iran’s GDP of $366.44 billion in 2023, anticipated growth to $386.22 billion in 2024.
Foreign trade with Iran entails employing a financial tool called a Non-Deliverable Forward (NDF) contract. With no physical currency exchange, NDFs neutralize non-convertibility using settlements in convertible currencies, generally the U.S. dollar facilitating cash flow differently.
Assessing the Iranian Rial vs. Toman
Although the Rial prevails officially, Iranians transact commonly using Toman (1 Toman = 10 Rials). Inflation-based redenomination discussions in 2020 proposed replacing Rial with Toman (1 Toman = 10,000 Rials), effectively slicing off zeros in transactional currency. Despite parliament adoption, Rial retains official currency status climaxing the year 2023.
Exclusive Iranian Rial Usage
Iran remains the singular country using the Iranian Rial.
How to Calculate the Iranian Rial Exchange Rate
Currency converters, like those accessible on XE.com, accurately depict IRR exchange rates against interested currencies.
Deciphering the Weakness of the Iranian Rial
Predominant causes for IRR’s diminished value trace to Iran’s political indifference and adverse global relationships due to perceived authoritarian governance, as well as ramifications of continuous economic sanctions. An economy encumbered with corruption and stringent state control doesn’t fortify modern economic maneuvering, compounded when oil export economies face market contractions.
Rial to Toman Conversion
For simple computations, 1 Toman stands equivalent to 10 Iranian Rials.
References
- CFI. “Iranian Rial (IRR)”.
- Investing.com. “USD/IRR - US Dollar Iranian Rial”.
- XE.com. “IRR - Iranian Rial”.
- OANDA. “Currency Converter”.
- Iran International. “Iran Sells More Oil but Revenue Falls Short”.
- Central Bank of the Islamic Republic of Iran. “Current Banknotes”.
- Central Bank of the Islamic Republic of Iran. “Coins”.
- Central Bank of the Islamic Republic of Iran. “General Information”.
- Iran Chamber of Commerce, Industries, Mines and Agriculture. “Iran To Begin Pilot Launch of Crypto-Rial Tomorrow”.
- Bitcoin.com. “Iranian Government Approves ‘Comprehensive and Detailed’ Crypto Regulations”.
- Council on Foreign Relations. “U.S. Relations With Iran: 1953 – 2023”.
- Office of Foreign Assets Control. “608. What Transactions Involving the Iranian Rial Are Sanctionable Under E.O. 13846?”
- International Monetary Fund. “Iran”.
- International Monetary Fund. “GDP, Current Prices”. Select Iran, download Selected Country Data.
- B2Broker. “What Are NDFs? Overview of Non-Deliverable Forward and Its Functionality”.
- CFI. “Iranian Rial (IRR)”.
- XE.com. “1 USD to IRR - Convert US Dollars to Iranian Rials”.
