Iran revives plan to remove four zeros from currency amid economic crisis

In an attempt to streamline financial operations, Iran’s parliament’s economic panel on Sunday resurrected long-delayed plans to remove four zeros from the country’s declining currency.

“Today’s meeting of the economic commission approved the name ‘rial’ as the national currency, as well as the removal of four zeros,” the economic commission chairman Shamseddin Hosseini announced on the website of the parliament, ICANA.

According to ICANA, one rial would be worth 10,000 at the present exchange rate and divided into 100 gherans under the proposed system.

After initial discussion in 2019, the intended redenomination was put on hold. The Guardian Council, which has the authority to review legislation, must approve the present law and it must pass a legislative vote.

The date of the parliamentary vote was not immediately clear.

Mohammad Reza Farzin, the governor of Iran’s central bank, stated in May that he would carry out the plan, pointing out that the Iranian rial “does not have a favourable image” in the international market.

The action was taken as Iran faces economic challenges, including uncontrollably high inflation, a depreciating currency, and the long-term effects of international sanctions.

According to local media and the Bonbast website, which tracks unofficial exchange rates, the rial was selling at about 920,000 to the US dollar on the street market as of Sunday.

In practice, Iranians have long abandoned the rial in everyday transactions, using the toman instead. One toman equals 10 rials.

Iran’s economy has long been under severe strain due to sweeping US sanctions since Washington’s 2018 withdrawal from a landmark nuclear deal during US President Donald Trump’s first term in office.

Upon returning to office in January, Trump revived his “maximum pressure” sanctions campaign on Tehran.

In June, Iranian lawmakers approved new economy minister Ali Madanizadeh after his predecessor, Abdolnaser Hemmati, was ousted in a no-confidence vote for failing to address the country’s economic woes.

The same month Israel launched an unprecedented attack on Iran’s nuclear and military infrastructure, beginning a deadly 12-day war.