Minister of Economy: Currency Change from Rial to Toman Will Be Gradual

Ali Tayebnia, the Minister of Economic Affairs and Finance of Iran, stated that the process of transitioning Iran's currency from rial to toman will be 'gradual and over time.' According to ISNA news agency, Tayebnia said on Thursday, December 23, in Semnan, 'Currently, no new banknotes are set to enter the market; rather, this important change will take place over a long period to avoid imposing significant costs on the country.' The Iranian Minister of Economy explained that 'the printing of banknotes during this period will be managed in such a way that the toman gradually replaces the rial in a natural course.' Previously, Ali Kamiyani, the Deputy Governor of the Central Bank of Iran, had mentioned the possibility of implementing 'minor' adjustments in the printing of new banknotes at the beginning of the next year. The removal of zeros from the national currency will only be effective if it is part of a comprehensive plan and closely related to other fundamental economic reforms. The emergence of so many zeros in Iran's monetary exchanges is a consequence of the collapse of the national economy, not a cause of it. Fereydoun Khavand, an economics professor in Paris, wrote on this matter: 'The removal of zeros from the national currency will only be effective if it is part of a comprehensive plan and closely related to other fundamental economic reforms. The emergence of so many zeros in Iran's monetary exchanges is a consequence of the collapse of the national economy, not a cause of it.' The Iranian government approved the plan to change the national currency unit from rial to toman in its meeting on December 7. This resolution is set to be presented to the Islamic Consultative Assembly as part of the 'Central Bank of the Islamic Republic of Iran' bill, and if approved, it must be ratified by the Guardian Council. Since the announcement of this decision, various economic officials in the Iranian government have expressed different opinions about the timing and manner of implementing this decision and its reasons. Among them, Akbar Kamiyani, the Deputy Governor of the Central Bank of Iran, stated that the reason for the government's decision to change the national currency unit was 'respect for societal norms and alignment with realities.' Valiollah Seif, the Governor of the Central Bank of Iran, considered the government's resolution in this regard as 'an action to relatively facilitate economic transactions for the community, formalizing the accepted norms of the people of the country, and in accordance with existing realities.' Economic officials in Hassan Rouhani's government have also stated that the government's resolution regarding the conversion of the currency unit from rial to toman is unrelated to the plan to remove zeros from the national currency. In this context, Ali Tayebnia said on Thursday, 'Removing zeros from Iran's currency is, in our view, the right thing to do, but it must be done at the appropriate time, and today is not that time.' The removal of zeros from the national currency was put on the agenda in 2007 by the order of former President Mahmoud Ahmadinejad, but his government did not last long enough to implement it, and the plan was shelved by the Central Bank.