page_title: Iranian rial
section_title: Value
hierarchical_section_title: Iranian rial / Value
caption_attribution_description: English: US dollar/Iranian rial exchange rates (2000-2011). Note: Iran has been using a managed floating exchange rate regime since unifying multiple exchange rates in March 2002 (up until 2010)
context_page_description: The rial is the currency of Iran.
  A proposal has been agreed to by the Iranian parliament to drop four zeros, by replacing the rial with a new currency called the toman, the name of a previous Iranian currency, at the rate of one toman = 10,000 rials. This change is expected to take place between 2020 and 2022.
  There is no official symbol for the currency but the Iranian standard ISIRI 820 defined a symbol for use on typewriters and the two Iranian standards ISIRI 2900 and ISIRI 3342 define a character code to be used for it. The Unicode Standard has a compatibility character defined U+FDFC ﷼ RIAL SIGN.
context_section_description: In 1932, the rial was pegged to the British pound at 1 pound = 59.75 rials. The exchange rate was 80.25 in 1936, 64.350 in 1939, 68.8 in 1940, 141 in 1941 and 129 in 1942. In 1945, the rial was pegged to the U.S. dollar at 1 dollar = 32.25 rials. The rate was 1 dollar = 75.75 rials in 1957. Iran did not follow the dollar's devaluation in 1973, leading to a new peg of 1 dollar = 68.725 rials. The peg to USD was dropped in 1975.
  In 1979, 70 rials equalled US$1. The value of the rial declined precipitously after the Islamic revolution because of capital flight from the country. Studies estimate that the flight of capital from Iran shortly before and after the revolution in the range of $30 to $40 billion. Whereas on March 15, 1978, 71.46 rials equalled US$1, in July 1999, US$1 equalled 9,430 rials.
  Injecting sudden foreign exchange revenues in the economic system forms the phenomenon of "Dutch disease" in a country. There are two main consequences for a country with Dutch disease: loss of price competitiveness in its production goods, and hence the exports of those goods; and an increase in imports. Both cases are clearly visible in Iran. The solution is to direct the extra revenues from oil into the National Development Fund for use in productive and efficient projects.
  Although described as an (interbank) "market rate", the value of the Iranian rial is tightly controlled by the central bank. The state ownership of oil export earnings and its large reserves, supervision of letters of credit, together with current – and capital outflow account – outflows allows management of demand. The central bank has allowed the rial to weaken in nominal terms (4.6% on average in 2009) in order to support the competitiveness of non-oil exports.
  There is an active black market in foreign exchange, but the development of the TSE rate and the ready availability of foreign exchange during 2000 narrowed the differential to as little as IR100 in mid-2000. However, the spread increased again in September 2010 because channels for transferring foreign currency to and from Iran being blocked because of international sanctions.
  Monetary policy is facilitated by a network of 50 Iranian-run forex dealers in Iran, the rest of the Middle East and Europe. According to the Wall Street Journal and dealers, the Iranian government was selling $250 million daily to keep the rial exchange rate against the US dollar between 9,700 and 9,900 in 2009. At times (before the devaluation of the rial in 2013) the authorities weakened the national currency intentionally by withholding the supply of hard currency to earn more rial-denominated income, usually at times when the government faced a budget deficit.
  The widening of the gap between official and unofficial exchange rates stood at over 20% in November 2011. This shows the correlation between the value of foreign currencies and the domestic inflationary environment.
  The unofficial rial to US dollar rate underwent severe fluctuations in January 2012 (the rial losing 50% of its value in a few days, following new international sanctions against the CBI), eventually settling at 17,000 rials at the end of the period. Besides all the bad effects on the economy in general, this had the effect of boosting the competitiveness of Iran's domestic industries abroad. Following President Mahmoud Ahmadinejad's decision to liberalize the mechanism by which bank interest rates are set (granting banks the authority to raise interest rates to 21%), CBI announced that it would be fixing the official rate of the rial against the dollar at 12,260 rials from January 28, 2012 and seek to meet all demand for foreign currency through banks.
  On September 25, 2012, the rial fell to a new low of 26,500 to the USD. The drop followed the government's launch of a foreign exchange center a day before, that would provide importers of some basic goods with foreign exchanges, at a rate about 2% cheaper than the open market rate on a given day. The announced rate at the center on September 24 was 23,620 rials to USD. By early October 2012, the rial
caption: The Iranian rial remained relatively stable against the US dollar until late 2011 when it lost two-third of its value within two years.[15]
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