Decline of the Iranian Rial and Its Macroeconomic Consequences

Abstract

Since the advent of Islamic Revolution in 1979 and due to foreign exchange controls by the Central Bank of Iran, the black market value of the Iranian rial had declined substantially as compared to its official value. In several articles published in professional journals I have first identified factors which has caused the rial to decline. I have then investigated the impact on Iranian economy of the depreciation of the rial. This paper collects and reviews those articles and provides a comprehensive review of issues involved with some policy implications.