Iran Considers Currency Reform by Dropping Four Zeros
The Economic Committee of the Iranian Parliament has recently brought back an old proposal to remove four zeros from the national currency. This move aims to make financial transactions easier amid ongoing economic struggles.
During a meeting, the committee’s chairman, Shamseddin Hosseini, announced that the national currency would be named ‘real’ and confirmed the decision to eliminate the four zeros. This information was reported by the council’s website, Icana.
The new system suggests that one RIAL would equal 10,000 on the current scale and would be divided into 100 Gherans.
This initiative was initially discussed in 2019 but was subsequently put on hold. Now, the bill still needs to pass a parliamentary vote and receive the Guardian Council’s approval, which holds significant authority in such matters.
As of now, it’s uncertain when the vote in Congress will occur. Back in May, Iran’s central bank governor, Mohammad Reza Farzin, expressed skepticism about the rial’s future in the global economy, affirming his commitment to pursuing the reform.
This decision comes in the context of Iran’s worsening economic conditions, characterized by skyrocketing inflation, unstable currency values, and the lingering effects of international sanctions.
Currently, the RIAL is trading at approximately 920,000 against the US dollar in the street market, according to Bonbast, a website that tracks local media and informal exchange rates.
Interestingly, many Iranians have been using Toman in everyday transactions, effectively sidelining the Real. One Toman equates to 10 Reals.
The Iranian economy has endured significant strain since the U.S. withdrew from the nuclear deal in 2018 during Donald Trump’s presidency, leading to the reimposition of strict sanctions.
Upon his return to office in January, Trump resumed his “maximum pressure” campaign against Tehran.
In June, Iranian lawmakers approved Ali Madanizadeh as the new Economy Minister after a vote of no confidence removed his predecessor, Abdulnaser Hemati, due to perceived failures in managing the economy.
That same month, Israel conducted an unprecedented military operation targeting Iran’s nuclear and military sites, escalating regional tensions.
