The Central Bank of Iran building

Iran Intends To Replace Dollar With Local Currencies For Travelers

Sunday, 09/10/2023

The Central Bank of Iran intends to offer regional currencies to citizens traveling to neighboring countries, instead of selling them US dollars.

Iran this year provided Iraqi dinars, instead of US dollars, to hundreds of thousands of pilgrims who visited Iraq at the end of August and early September for Shiite religious ceremonies. Now it intends to use the same tactic for providing foreign currency to travelers visiting regional countries.

The Iraqi dinars became available to the cash-strapped Iranian government when the United States in June allowed Baghdad to repay the equivalent of $2.7 billion from accrued energy import debts. It was reported at the time that part of funds will be for Iran to spend on Muslim pilgrimages to Saudi Arabia and Iraq. Apparently, a portion of the released funds were in Iraqi dinars.

Iran is critically short of hard currencies despite much higher oil exports in recent months in the face of US sanctions.

The chairman of the central bank Mohammad-Reza Farzin told local media on Saturday that Iran intends to use the Turkish lira or the UAE dirham for regular tourism based on the model it employed with the recent pilgrimage to Iraq.

The US dollar and other top currencies are near all-time highs in Tehran’s free market, while the government could sell regional currencies to tourists, possibly at more advantageous rates, converting regional currencies it earns from trade into Iranian rials for government expenses.

Farzin added that the central bank is in the process of expert analysis and planning for the move.

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