[CA/Econ] New Currency for Iran

Iran, recovering from the horrific outbreak of Coronavirus (COVID-19), has now started efforts to get its economy back on track. In this sequence, the parliament of Iran has approved a bill on national currency denomination, which allows to cutting four zeros from its national currency Rial & to rename it as ‘Toman’ which is equal to 10,000 rials.

It has taken this major decision to prevent a major fall in currency due to US (United States) sanctions. Now this bill will be presented before the committee headed by Iran’s supreme leader Ayatollah Khamenei for approval & the Central Bank of Iran- CBI (also known as Bank Markazi) will be given two years to change the currency.

·       Actually, there was a discussion in Iran about removing 4 zeros from the currency since 2008. But this demand had increased sharply after 2018, when US President Donald Trump decided to pull out of the 2015 nuclear deal with Iran.

·       After this, the US imposed large-scale sanctions on Iran. This led to a fall of up to 60 % in the Iranian currency. According to foreign exchange websites, the Iranian currency is at the level of 156,000 against the riyal dollar. The country also witnessed large-scale violent protests in late 2017 due to weakness in Iranian currency and increased inflation.

·       Significantly, the tension between the US and Iran is at a peak & it has been further exacerbated when the US killed Iranian Major General Qasem Soleimani in a missile attack in 2019.