Turkish Lira and Iranian Toman: Regional Powers and the Iraqi Dinar
How the Turkish lira and Iranian toman are priced against the Iraqi dinar, their turbulent histories, sanctions, and Iraq's border trade with Turkey and Iran.
Introduction: Two Regional Powers Bordering Iraq
Iraq sits between two major regional economic powers: Turkey to the north and Iran to the east. Each has a currency with a long history of turbulence, and each has a direct effect on the Iraqi economy through trade, investment, tourism, and remittances. The Turkish lira48.78+0.23% against the Iraqi dinar and the Iranian toman227,900−1.13% in Iraq have become among the exchange rates most closely followed by Iraqi traders, shopkeepers, and travelers on a daily basis, especially in Baghdad, Erbil, Sulaymaniyah, Mosul, and Basra. This article surveys the history of both currencies, the reasons behind their recent volatility, the nature of trade relations between Iraq and each of Turkey and Iran, and how to track the lira rate today and the toman through platforms like DinarView.
The Turkish Lira: From a Regional Currency to Severe Inflationary Challenges
The Turkish lira (TRY) has been the official currency of the Republic of Turkey since its modern founding in 1923 under Mustafa Kemal Atatürk, succeeding the Ottoman lira. For decades, the lira was a relatively stable currency tied to an economy pursuing industrialization and modernization, but it passed through difficult episodes, most notably chronic inflation in the 1970s and 1980s, then the 2001 financial crisis, which pushed the Turkish government to carry out a “zero-cutting” operation in 2005, replacing the old lira with a new lira (TRY) at a rate of one thousand old lira per new lira, aimed at simplifying monetary transactions after years of runaway inflation.
Over the past decade, the lira has again faced sharp inflationary pressure, driven by several factors: an unconventional monetary policy that for a period relied on cutting interest rates despite rising inflation, heavy economic dependence on imported energy, regional political volatility, and, at certain stages, declining external investor confidence. As a result, the lira lost a large share of its value against the US dollar and the euro in recent years, and domestic inflation in Turkey reached very high levels by international standards. Since roughly 2023, the Central Bank of Turkey has adopted a more conventional path based on gradually raising interest rates to curb inflation and restore some confidence in the currency, though the results need time to fully materialize.
The lira’s fluctuations cannot be separated from the size and diversity of the Turkish economy; Turkey has a broad industrial, agricultural, and tourism base, which gives the lira, despite its cyclical weakness, real weight in regional trade, particularly with its neighbors Iraq and Iran.
The Toman and the Iranian Rial: A Currency Under the Weight of Sanctions
The monetary situation in Iran is more complicated because of the dual naming between the “Iranian rial” (IRR), the currency’s official name, and the “toman,” which Iranians use in everyday life to express values (one toman equals roughly ten rials in common usage, though there are official proposals to issue a new currency called the toman with the zeros removed). This duality sometimes causes confusion even among local dealers, let alone Iraqi traders who deal with Iranian merchants or travel to Iran.
Since the Iranian Revolution of 1979, and through the Iran–Iraq War in the 1980s, the Iranian currency passed through successive stages of weakness, but its sharpest collapse in value has been tied to the international economic sanctions imposed on Iran over its nuclear program and other regional files, which escalated in particular after 2012 and again after the United States withdrew from the nuclear deal in 2018. These sanctions restricted Iran’s ability to export oil and access the international banking system, leading to a sharp and sustained decline in the value of the rial/toman on the parallel market, a significant rise in domestic inflation, and a wide gap between the officially announced rate at times and the free-market rate.
This reality has pushed the Iranian economy to rely increasingly on alternative trade channels, including border trade and exchange with neighboring countries not fully subject to the same restrictions, chief among them Iraq, which has become an important economic outlet for Iran through several border crossings.
Ten years of the lira, measured
Inflation is easier to argue about than to picture. The lira’s dollar price is not. DinarView has taken a daily reading since August 2016, and the yearly averages below are drawn from it.
The lira went from an average of 3.20 per dollar in 2016 to 45.4 in 2026. A currency that needs fifteen times as many units to buy the same dollar has lost about 93 per cent of its dollar value over the decade. The steepest single year was 2022, when the average nearly doubled from 8.88 to 16.5. There is no comparable move in the dinar’s record over the same period, and that difference is the whole reason Iraqi traders on the Turkish border price in dollars rather than in lira.
Iraq Between Its Two Neighbors: Border Trade, Remittances, and an Active Exchange Market
Iraq is linked to Turkey and Iran by deep trade relations that predate the sanctions and monetary crises by decades. On the Turkish side, Turkey is one of Iraq’s largest trading partners, exporting large quantities of foodstuffs, construction materials, furniture, and industrial products, while the reconstruction phase following the war against ISIS created a major opportunity for Turkish construction and contracting firms in areas such as Mosul and Anbar. The Kurdistan Region, particularly Erbil and Duhok, is also a major market for Turkish goods and investment given its geographic proximity and the ease of overland transport through border crossings.
With Iran, the trade relationship is broader and more diverse, covering food, electrical appliances, construction materials, and agricultural products, in addition to active commercial and religious pilgrimage traffic between Iraq’s holy cities (Najaf and Karbala) and Iranian cities. Border crossings such as Mandali, Khanaqin, and some southern crossing points are used as major channels for this trade. Because of the international sanctions on Iran, financial settlement of this trade is often carried out through indirect mechanisms, such as barter, special bank accounts, or traditional hawala remittance networks widespread in the region, rather than direct international bank transfers.
This dense trade interweaving naturally makes the Turkish lira and the Iranian toman two currencies actually traded in Iraqi exchange markets, especially in border cities and major commercial areas, where traders and shopkeepers need to convert their revenues or payments between the Iraqi dinar and these two currencies on an almost daily basis.
How Are the Lira and the Toman Priced on Iraqi Exchange Boards?
Practical pricing in Iraq relies on a simple principle: every foreign currency is first compared against the US dollar, because the dollar is the primary reference in the Iraqi market, whether through the official rate announced by the Central Bank of Iraq (1,310 dinars per dollar since February 2023) or through the parallel market rate, which is usually higher than the official rate. Accordingly, the exchange rate of the Turkish lira or the Iranian toman against the Iraqi dinar is, in essence, a combination of: that currency’s value against the dollar in its own domestic market, then the dollar’s value against the Iraqi dinar in the Iraqi market.
This dual composition explains why the lira’s and the toman’s rates against the Iraqi dinar move almost daily, since any additional weakness in the lira or the toman against the dollar globally is directly reflected in their value against the dinar at Iraqi exchange shops, even if the dollar-to-dinar rate itself does not change. Hence the importance of regularly tracking the lira rate today rather than relying on outdated figures, since small differences can accumulate quickly when converting large sums, especially for importing traders or for pilgrims and travelers.
DinarView keeps its market data continuously updated, offering an interface that lets its users in Baghdad, Erbil, Sulaymaniyah, and various Iraqi cities track the rates of the main currencies traded in the local market in a simple, clear way, alongside gold and cryptocurrency prices, without needing to check several scattered sources.
Both neighbours are quoted the same way on an Iraqi board: against the dollar first, then chained into dinars. That is why a lira or toman figure on a board in Zakho or Basra can move even on a day when nothing happened in Ankara or Tehran — the dinar leg moved instead.
| Year | Dinars per 100 lira | Dinars per 1,000 toman | Lira per $1 | Toman per $1 |
|---|---|---|---|---|
| 2022 | 8,309 | 45.2 | 16.5 | 30,917 |
| 2023 | 6,665 | 31.1 | 23.8 | 49,644 |
| 2024 | 4,565 | 24.3 | 32.9 | 62,083 |
| 2025 | 3,631 | 14.7 | 39.6 | 96,700 |
| 2026 | 3,371 | 9.1 | 45.4 | 170,282 |
DinarView yearly averages. Boards quote the lira per 100 units and the toman per 1,000, so the table follows the board. The dinar record starts in May 2022; 2026 runs to early September.
The direction is unambiguous. A hundred lira bought about 8,309 dinars in 2022 and about 3,371 in 2026 — a fall of roughly 59 per cent. A thousand toman went from about 45 dinars to about 9, a fall of roughly 80 per cent. For an Iraqi buying Turkish goods or travelling to Iran this has been a run of good years; for anyone holding lira or toman as savings it has been the opposite. That asymmetry is the reason exchange offices in Iraq treat both as currencies to sell quickly rather than to hold.
One caution about the toman. Iran quotes an official rial rate that almost nobody transacts at, and a free-market rate that everybody does. DinarView’s toman figure follows the free market, because that is what an Iraqi exchange office actually deals in. Comparing it against an official Iranian number will always produce a mismatch, and the mismatch is not an error in either source.
Factors Worth Watching Going Forward
For Iraqi observers interested in the trajectory of the lira and the toman, several factors are worth monitoring regularly:
- Turkish monetary policy: the Central Bank of Turkey’s interest rate decisions, the path of domestic inflation, and whether the more conventional approach to monetary policy continues.
- The course of negotiations and sanctions on Iran: any development in the Iranian nuclear file or in international relations can quickly be reflected in the toman’s value on the parallel market.
- The volume of Iraqi border trade: activity at border crossings with Turkey and Iran, and any customs or political changes affecting the flow of goods.
- The stability of the Iraqi dinar itself: since pricing is built on the dollar chain, any movement in the dollar-to-dinar exchange rate in the local market is automatically reflected in the rates of the lira and the toman.
Frequently Asked Questions
What is the difference between the toman and the Iranian rial?
The Iranian rial is the currency’s official name, while the toman is a day-to-day unit equal to roughly ten rials in popular and commercial use, which is worth noting when trading or asking about prices to avoid confusion over the number of zeros.
Why does the Turkish lira’s value against the Iraqi dinar change so often?
Because its rate is built in two stages: its value against the dollar globally, then the dollar’s exchange rate against the Iraqi dinar locally. Any movement on either side is reflected in the final rate displayed at exchange shops.
Do sanctions on Iran directly affect the Iraqi market?
Yes. Sanctions push part of Iranian–Iraqi trade toward non-banking channels such as hawala and barter, and they also make the toman’s value on the parallel market more volatile, which affects Iraqi traders who deal in it.
Where can I track the lira and toman rates daily?
Iraqi users can track updated exchange rates for the main currencies, including the Turkish lira and the Iranian toman, through the DinarView platform, which gathers market data in one place.
Conclusion
The Turkish lira and the Iranian toman remain a mirror of two large regional economies going through different stages of transformation and testing: Turkey seeking to curb inflation and restore investor confidence, and Iran dealing with a long legacy of sanctions and their pressure on its currency’s value. Given the geographic proximity and deep trade relations, the movement of these two currencies continues to have a direct impact on Iraqi traders, travelers, and consumers, making daily tracking of their rates part of the financial awareness required of anyone dealing in the Iraqi market. This article is for educational and informational purposes only and does not constitute investment or financial advice.
Sources
- Central Bank of the Republic of Türkiye
- Central Bank of Iraq — official exchange rates
- BIS Triennial Central Bank Survey 2025 — OTC foreign exchange turnover
- DinarView — live rate board
- DinarView — how our rates are collected
Rate figures marked DinarView are computed from this site’s own daily record. Everything else links to the publishing institution.
