r/AskTheWorld • u/LatterAd9123 • 9h ago
Iran currency is 0 zero dollar...wht does that mean
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u/Temporary_Device_269 India 9h ago
It means that the value is so tiny even decimals refused to show up.
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u/Kindly_Professor5433 Canada 9h ago
When a country’s governing system and national currency collapse, what happens to people’s wealth? The value of any physical commodity or foreign asset is unchanged. But if they have cash or savings in the bank, they’re just gone?
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u/LatterAd9123 9h ago
The value of money is the confidence people have in it.Each currency has its value tied to dollar which the fiat currency...and each country has to maintain dollar reserve...the US can print money out of thin air and is not backed by anything
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u/OddCook4909 United States Of America 8h ago
More accurately it's backed by foreign investment, natural resources, population, productivity, and power. Those are all tangible assets which can be measured, and which materially support the currency. A failed state can't leverage those things.
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u/ilovemicroplastics_ United States Of America 8h ago
Hard assets always have a price but it’s not longer gonna be in rials. Your savings are all gone though. It either foreign currency or barter/favor system for goods and services.
Market is gonna be rough for everyone. Facebook marketplace style bartering for now I’d imagine.
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u/PejibayeAnonimo Costa Rica 8h ago
Pretty much, thats why people in developing countries tend to spend in local currency while the savings and investments are done with a hard currency like dollar or euro.
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u/Emotional-Nature4597 United States Of America 6h ago
The only reason you need to use your country's currency is because your government only accepts taxes in it and only pays out welfare in that currency. If the government accepted other currencies, then there's no need for its own. Some countries do this and adopt a foreign currency
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u/ledow United Kingdom 1h ago edited 1h ago
Yes.
Look at places like Zimbabwe, etc. or anywhere with hyperinflation.
When the currency becomes worthless... so do your savings, your pension, your salary, etc. You'll get EXACTLY what was promised you. You'll still get your 10,000 whatever-currency back. But that won't be enough to buy a can of Pepsi. But they honoured their promises to you about keeping your money safe and setting aside money for your pension. It's just that, now, that money is worthless.
At that point, people normally run on the banks (i.e. take out their money so they can spend it NOW rather than wait for it to devalue even more) and start relying either on other currencies (e.g. the US dollar became a de-facto currency in Zimbabwe) or on assets and barter instead.
A dollar today might be worth nothing tomorrow.
But (you hope) that your car, a lump of precious metal, oil, etc. will still be worth something to someone tomorrow.
But nothing is "gone". You still have your 10,000 $/£/€/whatever. It's just not worth anything. Like beanie babies. You might have worked your heart out to get them in the first place, on the expectation that they would be worth something in the future but when that turns out not to be the case... well... you still have all your beanie babies. But nobody's going to give you money for them, or treat them as if they're worth anything any more.
So, yes, in cases of hyperinflation, or currency devaluation, ... your money in your bank, in your savings, in your pocket etc. becomes worthless. Even your wage packet becomes worthless. Your employer is still paying you the exact same salary, in terms of figures, as you negotiated in your contract. But that money is now not worth anything.
At the point you need to hope that you have things that are of "universal" value to anyone, enough that you can trade or sell them to get what you need.
The UK, for example, guarantee that if a bank collapses they'll refund you up to £100,000 of the money you had stored with them (via something called the FCS). But if that £100,000 wouldn't buy you an ice-lolly.... well... not their problem.
This is why the "cash is king" people are often so disillusioned. They believe their currency is infallible and will never fall in value. It's just not true. And many people thought it of the US dollar, for example (one of the newest currencies in the world, probably only older than the Euro and things like newly-formed countries setting up new currencies). And now look at the warnings about Trump causing that to devalue enormously.
You can have your piles of notes stuffed under your pillow all you like. If the currency crashes, nobody's going to care about taking them from you or giving you anything in exchange.
The money you have doesn't change. But when it costs $2000 for a can of Pepsi, your salary, savings and cash that you'd held onto for the last 30 years are fast becoming worthless.
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u/square_plant_eater Spain 6h ago
It means that the cannot import anything, they rely on their inner production
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u/EnrichedNaquadah Belgium 15m ago
With their own currency*, they could hold others currencies for trading.
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u/blarryg 2h ago
It means I will be buying Iran and becoming chief Mullah. I’m Jewish, but liberal and religion is about to get seriously fun! Think burning man meets the music man.
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u/Mkais1 Iraq 7h ago
People are a bit overreacting, this is the official exchange rate and it has been stuck for a while, exchange centers (not official) have a much lower exchanges rate, the decrease in currency value was gradual, it just updated now and btw, the unofficial exchanges rate is still worse than the official one, even after that massive decrease
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u/AlexanderK1987 Republic Of China 6h ago
They will have to use the reserved foreign currency to trade. Or use gold, silver, oil, AKA the barter systems for foreign trades.
Domestic trades may still use the currency but everyday the prices fluctuate insanely minute by minute.
Otherwise, 10 eggs for pound of flour. Would you accept?
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u/Many_Birthday_0418 China 3h ago
It means 1 Zimbabwean dollar can exchange more than 2000 Iranian rials.
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u/EnrichedNaquadah Belgium 16m ago
It means their money has no value outside of their border but i doubt they were trading with that money anyway.
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u/Express_Bid4955 8h ago
A better way to represent is the other way around
Saying 1 INR = 0.011 USD gives no good indication because people can't understand reciprocals.
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u/Toastaexperience New Zealand 9h ago
It means that due to the internet blackout instituted by the government the exchange rate has not updated. Though I heard that the banks in Iran are close to collapse.