Currency and Banking
The rial (ریال) is the official currency of Iran, however to save time in a high-inflation economy prices are sometimes quoted in tomans (تومان). One toman is equal to ten rials.
As a general guide, written prices are given in rials and prices quoted in conversation are in tomans. To confuse you even further, shopkeepers will often omit the denomination of high prices, so you may be told a jar of coffee costs 2 tomans (meaning 2,000 tomans or IR 20,000) and that a fine rug will cost 3 tomans (meaning 3,000,000 tomans or IR 30,000,000). In conversation, 1 Chomejni denotes IR 10,000.
Most travellers spend the first few days of their trip coming to grips with this mind-boggling system, and money changers on the border will often exploit this confusion to rip you off. Be careful, and if in doubt, always ask a shopkeeper or moneychanger if they are quoting a price in rials or tomans.
Carrying money :
Iran is still a cash economy, so bring enough hard currency for the duration of your stay. US dollars and euros are the most useful, and new and large (USD 100 or EUR 100 or higher) bills in good condition are preferred and usually get a better rate. Trade embargoes mean that banks will not forward cash advances on your foreign credit cards and they are only accepted by select stores for large purchases, such as Persian rugs. Most will be happy to forward you some cash on your credit card at the same time as your purchase. If you are desperate for cash, you can also try asking these shops to extend you the same favour without buying a rug or souvenir, but expect to pay dearly for the luxury.
In theory central banks in provincial capitals are able to cash Travellers’ cheques, but the paperwork and time involved make them impractical for tourist use.
ATMs exist in most cities, and there are point-of-sale devices in some larger stores, but only local bank cards are accepted. Bank Tejarat is now providing a prepaid smart-card service for foreign tourists travelling to Iran. Using this service, you can buy a prepaid smart-card with foreign currency which can be used on the domestic ATM and point-of-sale network for withdrawing rials. You can apply for this service at some travel agents, if they support the service, or by visiting the special Tejarat Bank kiosk in Tehran's Mehrabad international airport. Before your departure, the remaining credit on the card can be changed back to foreign currency. Since the domestic ATM network is prone to malfunctions, and point-of-sale devices are not common in stores, having a cash reserve (either rials or foreign currency) is still recommended.
Money and daily life :
There is little point in risking the black market moneychangers who loiter outside of major banks and only offer marginally better rates than the banks. Central banks in most cities will change money for you, but the process can be a drawn out affair requiring signatures from countless officials and a fair deal of running around.
A better compromise are the private exchange offices (sarāfi) scattered around most large cities and major tourist centres. Their rates are better to those of the banks, they are far quicker and unlike their black market colleagues they can be traced later on if something goes wrong.
The most widely-accepted currency is the US dollar, but euros and UK pound sterling are also widely used. Other currencies are harder to change. $100 notes attract the highest prices, and you will be quoted lower rates for any old or ripped notes.
Bargain ruthlessly when buying handcrafts, rugs or big ticket items and modestly when hailing private taxis. In most other aspects of life prices are fixed. Tipping is generally not expected, but locals will generally round up the bill in taxis and add around 10% in classy restaurants. Porters and bellboys will expect IR 2,000 - 3,000. A discreet gift of a few thousand tomāns may help grease the wheels of Iranian society and serve to thank an extraordinarily helpful local, but bakhsheeh and bribing are not a major part of Iranian life.
You won't be able to escape the government-sanctioned dual pricing system that applies to accommodation and some tourist attactions in Iran, foreigners often pay up to ten times the price quoted to locals. However thanks to the government's recent commendable efforts to eliminate 'foreigner' prices from many tourist attractions, most notably Persepolis, low food and transport costs make Iran a cheap travel destination.
If you are prepared to stay in the cheapest guesthouses, travel only by bus and eat only at fast food outlets or kabābis, you can get by in Iran on a minimum of around IR 100,000 per day. If you want to eat a decent restaurant meal every now and then and stay in mid-range accommodation, a more realistic budget is around IR 250,000. If you want to eat and sleep in luxury and fly between major sights, you can easily chew through IR 700,000 per day.