Rial is the official currency of the Islamic Republic of Iran. The creation of this Iranian unit of currency dates back to the year 1789. With the ascendency of the Qajar dynasty in that year, Agha Mohammad Khan, the first Qajar king and the founder of the dynasty chose Rial as the official currency of the country until Mohammad Shah Qajar, the third king of the Qajar decided to replace the Rial with the Qiran in 1825 along with the economic reforms he envisioned for Iran back then. This king suggested an exchange rate of 1 Qiran = 20 Shahi and the Qiran became the official currency in Iran, replacing the Rial. Almost a century later in 1925, the Qajar dynasty collapsed and Reza Shah Pahlavi became the new king of the new Pahlavi dynasty. With the goal of modernizing Iran in mind, Reza Shah began fundamental reforms all across the country in a variety of areas. In line with such reforms, he ordered that the nation of Iran return to the Rial as its official currency, with a 1=1 exchange rate of Qirans for Rials. Today, Iranian banknotes and coins are all in Rial. Iranian coins, which are now made of a copper and nickel alloy, exist in denominations of 50, 100, 250, 500, 1000, 2000, and 5000 Rials.
Major events that affected the value of the Rial through history
a. Occupation of Iran and the fall of Reza Shah
Before the Allied occupation of Iran in World War II, the rate of each U.S. Dollar in the Iranian economy was 14 Rials. Simultaneously with the arrival of the Allied army in Iran, which led to the fall of Reza Shah Pahlavi’s government and the jump in inflation from 13.8% to 49.5%, the Dollar exchange rate increased by more than 7% to 15 Rials.
b. The nationalization of Iran’s oil industry
The nationalization of Iran’s oil industry was accompanied by the imposition of sanctions on the sale of oil and a decrease in foreign exchange earnings for Iran. For this reason, in 1951, the price of the U.S. Dollar fluctuated to more than 60 Rials.
c. The 1953 Iranian coup d’état
Due to the currency crisis and the occurrence of a coup against the Mossadegh government in 1953, the U.S. Dollar exchange rate reached its highest level since 1922. Each U.S. Dollar was exchanged for 130 Rials at the time after the coup d’état of 19 August happened.
d. The Islamic Revolution of 1979
Before the occurrence of this turning point in Iran’s modern history, the price of the U.S. Dollar was at the rate of 70 Rials for about 10 years, with a slight fluctuation range. The event of the Revolution in 1979, however, ended the rule of the single Dollar at 70 Rials. The free Dollar exchange rate reached 100 Rials in the last days of 1979.
e. Iran–Iraq War (1980)
With the beginning of the war which lasted for nearly 8 years, the Dollar exchange rate in the open market turned considerably higher in price compared to the official exchange rate, and while each U.S. Dollar was traded at 140 Rials in the open market, the official dollar exchange rate was announced by the central bank equal to 70 Rials. The continuation of the war led the average price of the Dollar in 1980 to reach 200 Rials.
f. UN Security Council Resolution 598 and the official end of the war
The upward trend in the Dollar continued until July 1988, when Iran adopted Resolution 598 and began formal efforts to end the eight-year war with Iraq. Since 1986, the inflation rate of Iran’s economy has reached more than 20 percent and the country’s economic growth has been negative. This meant a fourfold devaluation of the national currency. Accordingly, the free dollar exchange rate in the open market during 1987 reached nearly 1000 Rials. This rate was on the eve of the adoption of the resolution of 1450 Rials.
g. The Joint Comprehensive Plan of Action (JCPOA) 2015
The price of the Dollar in July 2013, before the beginning of the 11th government in Iran, was 32710 Rials, which was a slight fluctuation of the Dollar before the implementation of the JCPOA in January 2015. At the same time and with the implementation of the nuclear deal, the average price of the dollar reached 36730 Rials, which showed an increase of 4000 Rials compared to the early days of the new government. But after the implementation of the deal, the fluctuations of the foreign exchange market became more severe than before.
Where to get the best IRR-related conversion rates?
For those who need to know the exact and updated exchange rates, the Trustply website has introduced a new service, providing its users with the latest hourly exchange rates of not only Dollar to Rial and vice versa, but of most other currencies around the world. To see the most up-to-date exchange rates of various currencies, click on the link below:
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