Search form

Last updated: 1 min 57 sec ago

You are here

Saudi Arabia

Money changers stay away from Iranian rial

Money exchange houses in Makkah and Madinah are refusing to accept Iranian rials from Iranian Umrah pilgrims because the value of the currency has fallen drastically.
Iranians are among the largest groups of foreign pilgrims in the Kingdom this year. They have resorted to using US dollars while abroad due to Iran’s deepening financial crisis, according to Arab News interviews with money exchange offices and retail shop-owners.
The Iranian rial’s value continues to drop in global financial markets, and has fallen far below the Iranian official exchange rate. It takes about IRR 38,450 Iranian rials to buy one US dollar in Tehran.
In February, the annual inflation rate of the Iranian rial reached 121 percent.
Since the beginning of Umrah season, money exchange houses and most shop owners in the holy cities are refusing to accept Iranian rials.
“It is a risk to accept the currency, which is losing value,” said one shop owner. However, some shop owners in Makkah are accepting 50,000 and 100,000 rial notes in the hope that they can sell them later if the value rises.
Gholamreza Rezaie, Iran’s Haj and pilgrimage representative in Saudi Arabia, said that there are more than 500,000 Iranian pilgrims performing Umrah this year. Each pilgrim pays around 30,000,000 rials ($ 2,442) for the pilgrimage. Many of these pilgrims come from the Tehran, Mashhad, Isfahan and Tabriz provinces, according to a report.
The deepening cash crisis is forcing Iran to deploy its security forces to patrol the streets of Tehran and other major cities, warning that security men would arrest anyone illegally trading dollars or carrying foreign currency without an official invoice.
A local Arabic daily reported that Adel Maltani, head of the exchange agents committee in Makkah, said the value of 10,000 Iranian rials is worth not more than 75 halalas. It was previously valued at SR 4.
Maltani said that financial markets during the first three months of the Umrah season contracted by 20 percent against the same period last year.
“The volume of exchange ranged between SR 12 and SR 15 million through 17 accredited exchange shops,” he said.
Maltani explained that some Arab countries too are experiencing political uncertainties with adverse effects on their currencies. Pilgrims from these countries are refraining from exchanging large volumes of cash. He cited the example of the Egyptian pound, which fell more than 15 percent in recent months.
The number of pilgrims from Algeria and Morocco has also dropped off from the previous year, Maltani said. “Those coming from Turkey are better off, in terms of their numbers and the volume of money they spend.”

MORE FROM Saudi Arabia