Currency, exchange and money in Iran

It is easy to forget in the modern world of credit cards, that cash and exchange rates would become of vital importance when travelling. Iran is one of the few countries that when it comes to money, one must be well prepared in advance. Understanding Iranian currency, its value and how the money works here is extremely important.

Iranian currency

Iran has two names for its currency – rial and tuman (also spelt riyal and toman) – but this is set to change. The government of Iran has announced in May 2020 that the Iranian currency would in near future be tuman and qeran with the deletion of four final zeros and rial as a name, but this is yet to be put into practice. We will keep you updated.

At present there are two exchange rates for Iranian currency (internationally abbreviated to IRR for Iranian Rial) – government exchange rate and the so-called free market exchange rate – and the difference between the two is immense (eg. €1 = IRR45,000 and 175,000 respectively). Both exchange rates are official and the existence of the two is mainly due to the government attempts to control the value of the currency for interbank transactions, while the actual value of the foreign currency in measured at the free market rate. All exchange shops (including some gold shops) change foreign currency at the free market rate, while banks use the government rate. In short, refrain from exchanging your money in Iranian banks, it is counterproductive.

Every city has a central area for exchange shops usually located within the vicinity of the main tourist sites. So, it is very easy to locate an exchange shop. The best foreign currency to bring to Iran is US Dollar or Euro. British Pound is also easy to change in the main cities, but in more rural areas it might become a little problematic. It is best to bring foreign currency and exchange it in Iran. It is either impossible to buy Iranian currency abroad or it would be sold at the government rate.

International and Iranian bank cards

The very vital thing to bear in mind and we cannot reiterate how important it is – no Visa or Mastercard or American Express are working or accepted in Iran. The only thing that can be a visa in Iran, is your Iranian tourist visa. There are no international AMTs in the airports, at land border crossings or five-star hotels or even embassies. Economic sanctions against Iran have alas been this drastic. In short, it is not possible to get a Visa card in Iran for spending money and you must bring cash with you for the entire duration of your trip.

That said, internal Iranian banking system is extremely advanced and you will notice people paying for even the tiniest of their purchases (up to €1) with a local credit card. That means that as a tourist, you must always have cash in various notes, preferably small, to ensure that a shopkeeper will be able to sell you that cool can of soda on a hot summer day, as he might not always have the cash to give you back the change.

Certain banks can however issue for tourists a so-called gift card for a limited amount to be used for online purchases within Iran or in Iranian ATMs. The inflation rate in Iran is very high and you would most likely spend the money on the card within a day or two and it might not be worth the time. This gift card cannot be topped up and once the money is finished, you would need to go to the bank again and request a new card. At present, it is unfortunately the only option for foreign tourists to have an Iranian bank card while in Iran.

Spending money

Huge inflation rates and the drop in the value of the Iranian currency due to the sanctions and especially after the US has in 2018 unilaterally withdrawn from the nuclear deal, means that with little foreign currency you can buy a lot in Iran. And there is a lot to buy here. Overall, you will experience Iran as an affordable destination with fair prices for excellent accommodation and food.

While staying in expensive hotels, tipping a porter is a common practice, it is however very uncommon in restaurants, even upmarket restaurants in Tehran. Some restaurants will add a service charge, which effectively covers the tipping. You can though tip your taxi driver – along the lines of “please keep the change” – but it is otherwise unusual.

The bargaining that Middle Eastern and Iranian bazaars are known for is neither that common and we would recommend it only if you are good at it or if the purchase was substantial (a carpet for example). In shops if the experience was pleasant, the shop seller might himself or herself offer a small discount. In the bazaar you can bargain a little bit, but do remember, merchants are proud and savvy people and selling is what they are good at. So, bargain, but only insofar as both of you enjoy the experience.