The Iranian Rial became the most invaluable currency since President Trump revoked the nuclear deal with Iran in 2019. The severe economic sanctions made life hard for Iranians. Prices tripled, unemployment increased, and the national revenues from oil shrank. The Iranian Rial is unstable, and people do not know how much things will cost from one day to the other. Here is a summary of everything you need to know about the Iranian Rial.
There are two currencies in Iran: Rial and Toman
The currency changed from Toman to Rial during the reign of Reza Pahlavi Shah in 1928. The official currency is Rial, but Iranians still use the Toman unit when they talk about prices. One Toman = 10 Rials.
It is confusing for the foreigners in Iran. If you see a price, you cannot know if it is Rial or Toman. So ask the sellers every time.
Iranian banknotes are bilingual, written in Persian and English. You got 310,000 Iranian Rial in June 2022 for 1 US Dollar. It means you will be a millionaire of Rials in Iran. The only problem is that it has not much value.
Tip: 1. check carefully how much money you changed and how many Rials you received in return.
2. Learn the Persian numbers to understand the price – You do not find the prices in Arabic numbers
- 1 – ۱ yek
- 2 – ۲ do
- 3 – ۳ se
- 4 – ۴ chahâr
- 5 – ۵ panj
- 6 – ۶ shesh
- 7 – ۷ haft
- 8 – ۸ hasht
- 9 – ۹ noh
- 10 – ۱۰ dah
The two exchange rates of Iran: the government rate and the regular exchange rate
To make it even more complicated, the Iranian currency has two different rates concerning international currencies.
They use the government rate almost exclusively for intergovernmental transactions. This is what you can find as exchange rates on the official websites (1 USD ~ 42,000 IRR).
The regular exchange rate is very different from the government rate. Unfortunately, mostly due to international sanctions the exchange rate is different almost every day. It changes sometimes several times a day.
How the Iranian currency became the least valuable in the world – currency crisis in Iran
The Islamic Revolution of 1979 in Iran took place at a time of stable economic growth. During the hostage crisis, the exchange rate to the Dollar was 70 Rials.
(On 4th November (13th of Aban) in 1979, a group of outraged radical Islamic students occupied and attacked the US embassy and took 65 diplomats hostage. They released 13 of them after 16 days and kept 52 diplomats for 444 days inside the building.)
But after the Revolution, the United States imposed economic sanctions. The gap between the Rial and the US Dollar was widening every day. Recently, the United States and many powerful allies expressed concerns about the nuclear activities of Iran. Then the United States introduced unilateral sanctions on Iran.
Following the resolution, Iran and the six superpowers discussed the nuclear program and the possibility of lifting the sanctions. They finally reached an agreement during the presidency of Barack Obama in 2015. According to the Joint Comprehensive Plan of Action (commonly known as the Iran deal), Iran promised to reduce its nuclear capacities and to give free access to officials from International Atomic Energy Agency to control that. After the agreement in 2015, the economic situation in Iran significantly improved.
The effect of repeated international sanctions on the Iranian currency
But when President Trump came into power, he declared that the United States would withdraw from the historic Iran Nuclear Deal in 2018. Things got complicated again.
The reason is that (as President Trump said) Iran broke several points of the agreement, continued to finance terrorist organizations, and develop its nuclear capacities. The United States re-imposed sanctions on the Iranian government and other quasi-governmental organizations harder than before 2015. Private companies and even individuals suspected of collaborating with the Iranian government also faced sanctions.
The Dollar exchange rate reached 80,000 Rials when the United States abandoned the Iran deal. It did not stop there. It went up to 200,000 Rials. In December 2021, one USD was around 260,000- 300,000 IRR. In June 2022, it was 310 000 IRR. In Ovember 2023 it was 520 00 Rial.
Iran is an oil-rich country. It possesses 10% of the world’s oil and 15% of the gas reserves. But after the break with the Iran deal, the oil export of Iran dropped sharply, and the Iranian currency suffered a freefall.
In the past, Iran managed to sell its high-capacity oil despite the difficulties and found a way to circumvent sanctions. These tricks helped to bring oil revenues into the country. But it does not work anymore with the particularly severe sanctions. There is no chance of getting any oil revenue.
Most of the revenue from other non-oil exports cannot enter the country either. The Iranian government must deposit these amounts in banks of other countries. The Iranian government is allowed to purchase basic civilian goods from these deposits.
Iran cannot inject its export money into the domestic banking system because Iran has not joined the FATF (Financial Action Task Force). It was founded to prevent global money laundering and terrorist financing activities as an inter-governmental body.
The United States has put maximum pressure on the Iranian economy since 2019 so that Iran succumbs to the US demands and stops expanding its influence in the Middle East.
The effect of economic sanctions on the life of Iranians
The Iranian government had to change its policies to make up for its budget deficits in other ways. The first relevant action of the government was to reduce fuel subsidies for cars. Suddenly, the price of petrol in Iran tripled. The enraged Iranian people took their rage to the streets at the end of 2019, and a series of protests started.
The sanctions affect middle-class and needy families the most. Middle-class families are getting poorer and the absolute poverty is rising.
The Coronavirus outbreak came on top of all that.
Many people lost their jobs due to the emergency lock-down. Iran was one of the first countries affected by the epidemic. When the borders were closed, there was absolutely no way to circumvent the sanctions.
Politics have strongly influenced life in Iran under the Islamic Republic. With President Trump stepping down, negotiations to revive the US-Iranian agreement are on the agenda again.
How much does it cost to live in Iran?
To make you understand how prices and living conditions changed due to the sanctions, please find below a summary of the costs in 2019 and 2020.
| Prices in summer 2019 in Rial | Prices in summer 2020 in Rial | |
| One liter of petrol | 10,000 | 30,000 |
| The average purchase price of a house per square meter | 100 million | 240 million |
| One kilogram apples | 40,000 | 120,000 |
| A can of tuna | 80,000 | 260,000 |
| A package of 30 eggs | 135,000 | 390,000 |
| A one-liter milk bottle | 27,000 | 71,000 |
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by Agnes Simigh
I’m a passionate tour guide and travel writer, who is curious to discover places that seldom catch the attention of the media or that are misrepresented. My goal is to inspire you to choose off-the-beaten-track destinations by sharing objective and detailed information. I believe that it is mainly the lack of “intel” that keeps us away from incredible places. And that just shouldn’t be the case.
by Ramin Paknejad
A tour guide in Iran for cultural and cycling tours with ten years of experience who jumps on every opportunity to bike long distances. After the start of the Syria war, he and his team completed the 5900km Tehran-Istanbul-Tehran “cycling for peace project”. His big dream is to bike from the North Cape of Norway to Cape Town in South Africa as soon as visa restrictions are eased.
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