Accessibility links

Breaking News

Iran's Central Bank Proposes Reform Of Battered Currency

Iranian Central Bank Governor Abdolnaser Hemmati (file photo)

The Iranian Central Bank has proposed a currency reform that would remove four zeros from the rial, Iranian state media have reported.

"A bill to remove four zeros from the national currency was presented to the government by the Central Bank yesterday," Bank Governor Abdolnaser Hemmati was quoted as saying on January 6 by the IRNA news agency. "I hope this matter can be concluded as soon as possible."

Iran's rial lost its value three-fold on the open market in 2018, although it has recovered somewhat in recent weeks. Inflation in Iran was nearly 40 percent last year.

The idea of removing four zeros from the rial had come up several times before but was never officially approved.

In July 2017 the government had proposed a bill to officially change Iran's currency from rial to tuman, which is currently used in everyday language to mean10 rials. The proposal is still languishing in parliament.

As of January 6, the rial was trading at about 110,000 to the U.S. dollar, according to foreign-exchange websites.

U.S. President Donald Trump has reimposed sanctions against Iran that were lifted as a result of the 2015 deal between Tehran and world powers aimed at curbing Iran's nuclear program.

Trump has said the deal was flawed and did not address Iran's ballistic-missile program or its support for organizations that the United States has labelled as terrorists.

Iran's economy also suffers from corruption and nepotism and is not conducive to investments, especially by foreign businesses, according to international organizations and financial watchdogs.

If approved by the government, the Central Bank's initiative would have to be passed by parliament and vetted by the Guardians Council.

Based on reporting by Reuters Iran media