Rial vs US Dollar: A Currency in Crisis – The Comprehensive 2025 Analysis

1.4. The Introduction of the Current Rial

In 2002, Iran introduced the “New Rial” (IRR) in an attempt to simplify transactions and restore confidence. This was part of a broader effort to stabilize the economy after years of fluctuation. However, the timing was unfortunate. This period coincided with the escalation of tensions over Iran’s nuclear program, which led to the first rounds of comprehensive international sanctions. Despite the redenomination, the fundamental economic weaknesses remained. The Central Bank of Iran (CBI) struggled to maintain liquidity, and the Rial continued to depreciate. The introduction of the new currency failed to address the root causes of economic instability: lack of access to hard currency, reliance on oil exports, and the stifling effects of international isolation.