What Is IRR?
IRR is the currency abbreviation or currency symbol for the Iranian rial, Iran's official currency. The currency is issued and managed by the Central Bank of the Islamic Republic of Iran.
The IRR was first seen in the 1800s, but it has seen its volatility or fluctuations over its history in particular after the Iranian revolution.
Iran is an oil exporting country whereby it nearly half of the government's budget is funded from the sale of oil. The Iranian rial comes in banknotes with denominations that include 100, 200, 500, 1,000, 2,000, and 100,000 rials as well as coins.
The IRR is not pegged to the U.S. dollar or any currency, meaning it has a free-floating exchange rate. However, Iran's central bank implements currency controls to keep the exchange rate stable. A stable exchange rate typically helps a country prevent capital flight or investment capital from fleeing the country looking for more stable returns.
Real World Example of IRR
Since the early 2,000s, the IRR exchange rate has fluctuated between 1,700 IRR to one U.S. dollar to as high as 43,000 IRR to one U.S. dollar. For example, if you were converting $1,000 to IRR at a rate of 43,000, you would receive 43,000,000 Iranian rials.