Iranian Currency: Rial vs Toman
The recent spotlight on Iran’s currency is due to the escalating geopolitical tensions and global economic policies. The US President, Donald Trump, has imposed tariffs of up to 25 percent on countries still doing business with Iran, causing various reactions, especially in Iran’s economy, leading to the devaluation of its national currency. In a recent note, Iran’s currency, the rial, was reported to have reached its lowest level against the euro. This reflects the heavy pressure on Iran’s economy due to sanctions and prolonged inflation.
Surprisingly, when visiting traditional markets or shopping centers in Iran, the term “rial” is rarely heard in daily transactions. Instead, locals are more accustomed to using the term “toman” when stating prices for goods or services. This phenomenon is closely related to the extremely high inflation rate. As a practical solution to avoid dealing with large numbers, Iran uses an alternative counting system known as toman.
So, what is the official currency in Iran, and what is the fundamental difference between rial and toman that often confuses travelers and international economic observers? Below is a comprehensive review gathered from various sources.
Official Currency of Iran
Legally and administratively, Iran has set the rial as its official currency. All banking activities, government documents, and price listings in modern shopping centers use the rial unit with the international code IRR.
Difference Between Rial and Toman in Iran
Despite this, in daily life, Iranians almost never use the term “rial” in transactions. They are more accustomed to using “toman” in buying and selling conversations, whether in traditional markets or small shops. In practice, one toman is much simpler to mention compared to rial. One toman is equivalent to 10,000 rials, which can be understood as rial with four zeros eliminated. This system makes it easier for people to state prices without using long strings of numbers, even though rial remains the country’s official currency.
Historically and legally, the rial is a valid currency printed on banknotes and used in all financial documents. However, due to the continuous inflation depressing the value of the rial, people have opted for a practical way to simplify the value by using toman. The basic formula is simple: one toman is worth ten old rials.
This difference in denomination often confuses foreign tourists when visiting Iran for the first time. To end the long-standing confusion and simplify the national financial system, the Iranian government, through the Central Bank of Iran (CBI), initiated a redenomination policy in 2020. The process was expanded and implemented gradually from 2025 to 2026.
With this policy, Iran officially changed its main currency unit from rial to the new toman by eliminating four zeros. This new currency is also divided into smaller units called qiran, where one toman consists of 100 qiran. During the transition period, the old banknotes remain valid and in circulation alongside the new currency. The newer banknotes feature smaller denominations and shadow zero numbers to indicate the system change and gradual adjustment for the public.
Factors Contributing to the Weakness of the Iranian Currency
– International economic sanctions have been a significant pressure on the stability of the exchange rate.
– Geopolitical situations in the Middle East region also have a significant impact on market confidence.
– Every time political tensions rise, the value of the rial almost always weakens further.
– Restrictions on oil exports and limited access to the global banking system have caused a continuous decline in the country’s foreign exchange earnings.
– Domestically, the high inflation rate year-on-year has eroded the purchasing power of the people and weakened the currency.
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Source: ANTARA News – Iranian Currency: Rial vs Toman
