Iranian Rial - IRR

Overview

The Iranian Rial is issued by the Central Bank of the Islamic Republic of Iran. 100 dinar make up a Rial; however, dinar are not used in accounting because of the very low value of the Rial.

Economy

• Iran has the eighteenth largest economy in the world in purchasing power parity (PPP). Over half of Iran’s GDP comes from the service sector, over a third from industry and manufacturing, and around 10% from agriculture.
• Iran's economy is a mixture of central planning, state ownership of oil and other large concerns, village agriculture and small-scale private trading and service companies.
• Iran has significant oil and gas reserves, and about 45% of government budget revenues come from exports of these commodities. The continued rise in world oil prices has eased some of the financial impact of international sanctions against the country.
• Price controls, subsidies, and other rigid government policies weigh down the economy, and corruption is widespread. The government has introduced some measures to improve efficiencies, such as reducing state subsidies on food and energy. However, the economy continues to suffer from inflation, unemployment and sluggish growth.

History

• The Iranian Rial first appeared as a coin, from 1798 to 1825. The name derived from the Real, the currency of Spain at the time.
• The Rial was reintroduced in 1932, divided into one hundred (new) dinars. It replaced the toman (which is the term still used today by Iranians when they discuss money).
• The value of the Iranian Rial declined precipitously after the Islamic revolution of 1979 because of capital flight from the country (estimated at $30 to $40 billion).
• The value of the Iranian Rial is stable, thanks to tight control by the central bank, which manages demand through state ownership of oil export earnings, and oversight of monetary flows. The bank does allow the rial to weaken in nominal terms to improve the competitiveness of non-oil exports.

General Information