Kathmandu: To tackle years of high inflation, Iran’s parliament has approved a plan allowing the government to revalue the national currency by removing four zeros from the Iranian Rial. According to Reuters, this decision opens the way for major monetary reform in the coming years.
The move aims to make daily transactions easier and reduce the impact of inflation, which has exceeded 35 percent for several years. Because of this, the value of the Rial has sharply fallen against the US dollar. Currently, one US dollar equals about 1.15 million Iranian Rials in the open market. This has made accounting and financial record-keeping very difficult for citizens.
The bill had been under discussion for years. After resolving questions raised by Iran’s Guardian Council, the parliament finally approved it.
“The Iranian Rial will remain the national currency, but the change will not happen overnight,” said Economic Commission head Samsoldin Hosseini on state television. “The Central Bank will have two years to prepare for the revaluation, followed by a three-year transition period during which both old and new values will be used.”
Hosseini added that the reform will make calculations and transactions much easier since the extreme inflation has reduced the usefulness of banknotes. However, some lawmakers criticized the move.
“Simply removing four zeros will not restore the Rial’s real value or reputation. It can only be achieved by strengthening the currency’s actual purchasing power,” said Iranian MP Hossein Samsami, quoted by the Iranian Students News Agency.
Currently, Iran issues coins in denominations of 50, 100, 250, 500, 1,000, 2,000, and 5,000 Rials, and banknotes ranging from 100 to 100,000 Rials.
Several other countries facing extreme inflation, including Venezuela, have also removed zeros from their currencies, though the results have often failed to stop rising prices.
