Cabinet votes to change National Currency

By Changiz M. Varzi for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.

President Hassan Rouhani’s Cabinet voted on Dec. 7 to approve a bill that proposes to change Iran’s currency from the rial to the toman, and to remove one zero, the official Islamic Republic News Agency (IRNA) reported.

The measure was proposed by the Central Bank of Iran (CBI) and needs parliament and Guardian Council approval to take effect.

The move came less than a month after Abolfazl Akrami, director general for economic affairs at the CBI, told the semi-official Iranian Student News Agency that the CBI had no plans to slash zeros from Iran’s national currency. On Nov. 14, he stressed, “If inflation rate remains below 10%, if we manage to unify multi-tier exchange rate and if economic growth remains stable, then we can remove [a] zero from the national currency.” Iran currently has two exchange rates; the CBI fixes the official one, and the other is the informal open market rate.

Meanwhile, the deputy governor of the CBI, Akbar Komijani, on Dec. 8 told the IRNA that the move should not be considered as the implementation of “monetary correction” in the country, but to “respect the public and accept the currency that they use on a daily basis.”

The rial has been Iran’s official currency since March 23, 1932. Nevertheless, apart from officials and due to the sharp fall of the rial’s value in recent years, Iranians in their daily lives use the toman, which is equal to 10 rial. Neither “rial” nor “toman” are Persian words, but have Turko-Mongol and Spanish-Portuguese origins, respectively, with “rial” deriving from “real” (royal).

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