There are no international banking systems in Iran. Therefore, you will not be able to withdraw money from an ATM here with a non-Iranian card. You have two options: take dollars or euros with you and exchange them on the go, or buy an Iranian prepaid card for tourists in Iran. But first, it’s worth learning more about the double Iranian currency and the notes in use.
Understanding rials and tomans
To make the currency story short and simple let’s say, that:
The official Iranian currency is RIAL (IRR), which has been subject to rampant inflation over the last decade. In 2021, the currency inflation rate was 43.4% according to worlddata.info, in 2022 – 48.96%). In previous years, it was similar – actually, the Iranian rial fell into sudden serious troubles when US President Donald Trump withdrew from the nuclear deal with Tehran (in 2018) and reinstated economic sanctions suspended three years earlier.
With the Iranian currency rapidly declining, daily settlements have become complicated for Iranian citizens. The Central Bank of the Islamic Republic of Iran has announced a currency reform in which redenomination (10 000:1) is to be carried out.
At the beginning of 2021, new banknotes and checks – were introduced to the market by the central bank. New notes had double denomination – in rials and in tomans. Officially, the redenomination process is ongoing and the date of its completion is unknown.
The concept of “toman” settled in the social consciousness and Iranians began to use this name when listing prices. However, in the common understanding, it was enough to cut off one zero from the amount in rials and the resulting value was the value in tomans. A million turned into 100 000 this way.
There are many hypotheses as to why this happened. One of the common opinions says that redenomination was a bottom-up process, i.e. invented by people, and done in stages. In the first stage, one zero was cut off, and now three zeros representing thousands are omitted. However, it seems most likely to us that the 10 000:1 operation, if applied immediately, would make it impossible to settle small amounts and give change.
How to convert rials to tomans?
1 000 000 rials = 100 000 tomans = 100 tomans
Yes, it seemed weird to us at first too. However, the easiest way to remember this process is:
Cut off one zero from the price in rials – this way you will get the price in “folk” tomans. From the price in “folk” tomans, cut off three zeros – this way you will get the price in “government” tomans.
Let’s take a look at what it looks like on popular notes. Obverse on the left, reverse on the right:
Old and new note 1 000 000 rials
Note that the denomination is given twice on the notes – in rials (1 000 000 rials) and in government tomans (100 tomans). A complication is that the banknotes come in several versions and you just have to learn how they look.
Notes of the same denomination may vary in size and color.
Some older banknotes have the value in Arabic numerals on one side only. It is worth learning Arabic-Indian numbers from 0 to 9 – it will make things easier in many situations.
How do Iranians quote prices?
Iranians will quote the price in all possible ways: in rials, tomans of both types and sometimes – when they want to emphasize how cheap something is in Iran, they will comment on the price:
Only 2 $, so cheap for you…
In official price lists – e.g. in hotels, in large supermarkets, prices are usually written in rials. In shops with handicrafts, souvenirs – if they are given at all, they are handwritten in tomans (in Arabic-Indian numerals). There is a government fuel price at the gas stations that will please you (at the time we traveled there – December 2022 – March 2023 – it was 30,000 rials per liter – about 7 cents).
Where there are no prices and you ask for them – make sure whether the seller gives the price in rials or in tomans. Stay alert! It’s easy to make mistakes here, because of the language barrier (few sellers know English), and – as everywhere – in Iran you can also find someone who takes advantage of a foreigner.
It is worth checking whether you have understood the price correctly by writing the price in “folk” tomans on the smartphone calculator and asking “toman”?
It is also worth working out benchmarks based on what basic things can cost in Iran. For a European, prices in Iran appear low, but the initial confusion with different currencies and banknotes makes it easy to be mislead.
Here’s an example: In the second week of our stay in Iran we ordered 2 chicken legs from a street fast food place. We gave the seller a smartphone to enter the price on calculator and he typed in 800. It seemed weird at first – 800 tomans? It would be around $20. This price in Europe is quite possible, but it seemed far too much for Iranian realities. We handed the salesman bill of 100 tomans (100 000 tomans aka 1 000 000 rials). He stared at us apparently waiting until we give him another 7 hundred notes. However, we were not deceived and reached out for the rest. Seeing that the trick failed, he handed over 20 tomans reluctantly and settled the rest.
Mah Card – Travel debit card for Tourists
The cashless payment system is well developed in Iran. Everywhere – in the smallest booth, in the most remote village, you can pay with card … an Iranian card.
As a foreigner, you can pay with Mah Card – a prepaid debit card for tourists. You can order the Mah tourist card on the official website (€19 fee per issue), or through travel agency that helped you to obtain iranian visa. Mah Card gets delivered to you at your hotel or post office. You can top it up online via bank transfers. The exchange rate from your $ or € is slightly lower than the free market rate and is charged a 7% currency conversion fee. Mah card payments are free of charge.
However, cash withdrawals are subject to restrictions. Withdrawals are free of charge, but you can only make them at Ayandeh Bank ATMs and with 2,000,000 rials per day limit (200 000 aka 200 tomans).
Is it a lot or a little? Well – you will not be able to pay with this amount for 1 night in an average quality hotel, but you can cover food for 1 day. Another example: a ticket for a foreigner in almost every museum or other attraction costs 1 000 000 rials (100 000 aka 100 tomans).
Cash in Iran
You can pay cash everywhere. Be aware, that you need to take dollars or euros with you on the trip, because these 2 currencies you can exchange easily. Take more money for unexpected expenses, because during your stay in Iran you will lose access to your money stored in bank accounts. It is also worth taking a large sachet as the exchange rate is such that for just $ 100 you will receive a few centimeters of Iranian banknotes.
Banknotes have to be learned, because one denomination comes in several incarnations. You will often receive low-value bills when exchanging, which will add extra mass to your wallet. Carrying such a file is cumbersome, but it is a more financially advantageous option than using the Mah card.
In grocery stores and for purchases of small value, when the seller does not find low denominations in the cash register – you can get change in candy.
When planning for a currency exchange, it is best to take the denominations of 100 and 50 dollars / euro with you and exchange them gradually, because the rial devalues very quickly, which is reflected both in the amount of rials you get for dollars or euros, as well as in the prices you will pay for hotels, restaurants and shopping.
For example, when we entered Iran $1 equaled 380 000 rials (38 000 aka 38 tomans). 3 months later – already 520 000 rials (52 000 aka 52 tomans).
How and where to exchange currency in Iran?
Worst, least beneficial is exchanging in banks – rates are set at a very low level by the government. A little better in exchange offices, but there are few of them and sometimes they refuse transactions at all, saying there is a system failure or they suffer from lack of cash.
Best exchange is in jewelry stores and shops trading investment gold.
The best strategy for us was to locate the goldsmith street in the bazaar and go from one gold shop to another. Usually, at the farthest third or fourth store we asked, the goldsmith wanted to protect the assets from devaluation and had enough money in the safe to complete the transaction. Therefore willingly exchanged rials for dollars.
Where to check the exchange rate in Iran?
Check the free market rate at bonbast.com (the website works in Iran only with a VPN). This page gives you the exchange rate in “folk” tomans, with three zeros. You will rarely get the exchange rate listed here in your transactions. We usually managed to exchange about 1 000 tomans less than bonbast rates.
When exchanging money, ask for high denominations. If the seller understands English, ask for “blue notes” – this is the color of highest denomination (1 million rials or 100 tomans) and if you get it during the exchange, you will significantly restrict the thickness of your wallet.
What to choose – Mah card or cash?
Main differences between payment methods are mentioned below.
| Comparison | Cash | Card |
|---|---|---|
| Currency acquisition | Free market exchange (goldshops, money exchangers) | Bank transfer from EU account |
| The value for $ you’ll get compared to the free market rate | 95-100% | 75-80% |
| Shortcomings | – Need to carry physical cash – Taking time to find a place and carry out the exchange | – Limited cash access – The need for planning withdrawals from ATMs before major purchases in some bazaars |
Proponents of cash are usually persuaded by its almost full financial value in relation to the free market rate.
A fun fact to finish the topic of payments
Iranians pay no attention to security of their payment card. Ordinary citizens know how to operate payment terminals. Many times you will see the customer handing the card to the merchant and then loudly dictating the pin to him. Or when the seller is busy sorting the goods – the customer asks him about the price, enters it himself into the instructions on the terminal counter, authorizes the payment and exits the shop. Something unthinkable in Europe, not surprising here!
