Iran issues 10 million rial banknotes amid hyperinflation

Iran’s Central Bank has issued the country’s highest denomination banknote ever, the 10 million rial note (approximately $7). This move comes amid prolonged war, Western sanctions, and a plunging rial value leading to runaway inflation.

Highest denomination banknote in history still only worth $7

This week, Iran’s Central Bank began circulating the 10 million rial banknote. The pink note features the Yazd Jameh Mosque built in the 9th century on the front, and the 2,500-year-old Bam Citadel on the back. It replaces the 5 million rial note introduced in early February and is now the highest denomination in circulation.

The issue is that the actual value of this 10 million rial note is only about $7. At current exchange rates, the 5 million rial note is worth roughly $3.

Inflation, war, sanctions—“triple crisis”

Iran’s economy is facing a complex crisis. According to Iran’s Statistical Center, the official annual inflation rate as of February is 47.5%, but some believe actual prices are much higher. Notably, food and beverage inflation during the same period has exceeded 105%. This is a consequence of the government removing foreign exchange subsidies on essential imports.

Before the outbreak of war on February 28, the rial hit a record low of 1 USD = 1,660,000 rials. Although it has slightly recovered to about 1 USD = 1,500,000 rials, fundamental instability remains. After the 12-day war with Israel last year, the rial depreciated by 40% over several months.

Bank network outages and cash withdrawal crisis

During the war, U.S. and Israeli airstrikes on infrastructure also impacted Iran’s financial system. On March 11, the Sepah Bank building, serving both the military and civilians, was hit by a missile, causing a temporary halt in financial services. A few days later, ATM and card services resumed, but online banking is still being restored.

Fears over unstable networks led to long queues at ATMs. Mariam, an 80-year-old resident of Tehran, said, “I waited an hour, and the teller said they could only give 10 million rials. After protesting, I finally got 30 million rials. That’s only enough to last a few days without bank card access.”

Currency redenomination underway

Iran passed a law in November to remove four zeros from the rial over the next five years. The newly issued 10 million rial note features the last four zeros in light print, with a bold “1,000” marked on it. All new banknotes issued after 2019 follow this design to facilitate currency reform.

Meanwhile, with Nowruz—the Iranian New Year—approaching, there is a seasonal increase in cash demand due to the tradition of giving cash gifts to friends and family. The international community is closely watching how long Iran’s economy can sustain itself amid war, sanctions, and hyperinflation.