In an attempt to streamline financial operations, Iran’s parliament’s economic commission 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,” said the parliament’s website ICANA, quoting Shamseddin Hosseini, the commission’s chairman.
Under the proposed system, one rial would be equivalent to 10,000 at the current value and subdivided into 100 gherans, according to ICANA.
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 current law and it must pass a legislative vote.
The date of the parliamentary vote was not immediately apparent.
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’s economic problems worsen, including uncontrollably high inflation, a depreciating currency, and the long-term effects of international sanctions.
As of Sunday, the rial was trading at around 920,000 to the US dollar on the street market, according to local media and the Bonbast website that monitors unofficial exchange rates.
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.
Trump resurrected his “maximum pressure” sanctions campaign against Tehran after taking office again in January.
After his predecessor, Abdolnaser Hemmati, was removed in a no-confidence vote for failing to solve the nation’s economic problems, Iranian parliament approved Ali Madanizadeh as the country’s new economy minister in June.
Israel started a catastrophic 12-day war with Iran that same month after launching an unprecedented attack on its military and nuclear facilities.
