Deputy Governor of the Central Bank: Changing the Currency Unit Does Not Mean Monetary Reform

The Deputy Governor of the Central Bank of Iran described the change of the national currency unit from rial to toman as merely for 'respecting societal norms' and distinguished it from 'monetary reform.' In a report on Thursday, December 9, by the official news agency of the Islamic Republic, IRNA, Akbar Komijani, the Deputy of the Central Bank, stated that the recent government resolution in this regard 'has no relation to the removal of zeros from the national currency.' He added that the government council decided to change the currency unit solely to 'align with realities and respect customs,' as 'toman is more commonly used than rial in transactions and daily speech.' Mr. Komijani also differentiated the concept of toman and its replacement of rial from 'monetary reform,' adding that 'monetary reform is a more comprehensive activity that must consider all financial, economic, and accounting aspects.' He also mentioned the possibility of sending a separate monetary reform bill to the parliament in the future. The government resolution regarding the change of the national currency unit from rial to toman must be approved by the representatives of the Islamic Consultative Assembly to become law. This government action was welcomed by some members of parliament. Hassan Hosseini Shahroodi, the Secretary of the Economic Commission of the Parliament, praised and supported the government's change of the national currency unit, adding that 'I wish the government had taken bolder steps to remove three or four zeros.' According to Komijani, if this issue is approved by the parliament, there may be 'minor adjustments' in the printing of new banknotes at the beginning of the next year. Also, on the previous day, Valiollah Seif, the Governor of the Central Bank of Iran, described the government's action of changing the national currency unit from rial to toman as 'formalizing the prevailing custom' of society and dismissed any 'psychological and inflationary' effects of this action. He stated that this resolution was based on 'facilitating transactions, aligning with the economic realities of the country, and being consistent with the public culture.' The removal of zeros from the national currency was on the agenda of the government in 2007 under the directive of Mahmoud Ahmadinejad, the former president of Iran, but the government did not last long enough to implement it, and the plan was archived by the Central Bank. The idea of removing zeros from the national currency began in 1993 by the Central Bank, which had stated the necessity of removing zeros from the national currency, asserting that 'the accumulated inflation of the past four decades has reduced the purchasing power of the country's currency.'