Islamic Republic of Iran: currency of country with high inflation rate

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The effects of the financial crisis that hit the world economy in the first decade of the twenty-first century are still being felt. Particularly sensitive to these phenomena were countries with medium and low living standards. The Islamic Republic of Iran is one of these states. The currency of the state, which even before the crisis “pleased” its citizens with a high level of inflation, after the sad financial events began to lose its value even faster. The grim process that accompanies the price hike in the country is the rise in unemployment.

This phenomenon of an economic nature "absorbed" to a greater extent the youth masses of the population. The result was unrest in Tehran, the capital of the Islamic Republic of Iran. The country's currency catastrophically reduces its positions. An additional factor influencing galloping inflation is the absence of a foreign reserve currency in the country. USArefuses to extend a helping hand to the state, explaining his behavior as unwillingness to support the growing nuclear program of the Islamic Republic.

A country independent of Persia

Even at the beginning of the twentieth century, a completely different country was located on the territory of modern Iran. Until 1935, the lands of the Muslim state were united under the name of Persia. Then the country received its new name, which has survived to this day. Before the country gained independence, it was ruled by the Shahs. However, in 1979, the last representative of the dynasty fled the country, leaving only historical memories of himself. And a new independent state appeared on the world map - Iran. The currency of a sovereign republic was born a year later - in 1980. The national currency of the Islamic Republic became known as the rial.

Dinars and fogs

For more than thirty years, the currency has practically not changed its shape, color and content. Only the denominations of issued banknotes and their value on the world stock market changed. There is another monetary unit that is common in the Republic of Iran. The currency is called fog and is equal to ten reais. Tourists visiting a Muslim state are very confused at first: it is quite difficult to understand in which monetary unit this or that price is announced. In the early stages of the development of the state, dinars were also present in circulation. One hundred units of this denomination amounted to one real. Over time, dinars ceased to be used. The reason for this washigh inflation, adding zeros and depreciating the country's currency.

Paper notes and metal notes

Currently, the country's national currency is in circulation in the form of paper notes and metal banknotes. Initially, printed bank notes were issued in denominations of one hundred, two hundred and five hundred rials. Gradually, banknotes corresponding to them came into circulation, the denomination of which increased ten, and then a hundred times. In addition to paper banknotes, Iranian currency also includes coins. Metal rounds are minted in denominations of fifty, one hundred, quarter thousand and five hundred rials.

The main and main problem facing the government of the country is a sharp drop in the value of the national currency. Iran's currency, which is heavily influenced by inflation, is losing ground every day. In 2012, its colossal fall was observed: in one day, the rial fell in price by 40% at once. The decline in the value of the currency continues to this day. It is noteworthy that it is possible to import foreign currency into the country only in limited quantities. And withdrawing from a plastic card of a foreign bank is almost impossible.