The Government Sends a Bill to Remove Four Zeros from Iran's National Currency to Parliament for 'Preserving Its Prestige'

The Islamic Republic government has submitted an urgent bill to the Islamic Consultative Assembly to remove four zeros from the national currency and convert its unit from rial to toman. The government of Masoud Pezeshkian has stated that the aim of preparing and submitting this bill to parliament is to 'reduce problems caused by chronic inflation and decrease the purchasing power of the national currency,' which in recent years has led to increased figures in daily transactions and a 'decline in the apparent prestige of the national currency' compared to other international currencies. Tasnim News Agency reported on Saturday, December 22, that this bill was approved by the twelfth government council under President Hassan Rouhani in August 2019 and is now being presented to parliament as an urgent bill by the fourteenth government. The effort to preserve the 'prestige' of the national currency by removing four zeros comes at a time when the Iranian rial is currently the least valuable currency in the world, and its devaluation continues. Although removing four zeros from the national currency could facilitate transactions in the market, the government has not explained how it expects inflation to decrease by removing four zeros from the national currency. The decline in the value of the rial began at the start of the Islamic Revolution in 1979 and was exacerbated by the Iran-Iraq War and subsequent economic sanctions related to Iran's nuclear activities. The exchange rate of one US dollar in 1979 was equivalent to 70 rials, but this figure has now soared to 770,000 rials. The text of the bill states that the currency unit of Iran will be 'toman,' with each toman equivalent to 10,000 current rials and one hundred parsa. Additionally, to facilitate the transition to the new system, a two-year period has been designated as a 'transition period' for the simultaneous use of toman and rial. During this time, the Central Bank is required to make the necessary executive arrangements for collecting and replacing rial banknotes and coins with toman. Currently, the Iranian rial is even less valuable than the Yemeni rial, and the Syrian pound, despite 14 years of civil war and the fall of Bashar al-Assad's regime, is worth 50 times more than the Iranian rial. Besides Iran, the currency of Oman, Saudi Arabia, Qatar, and Yemen is also rial. At the beginning of the Islamic Revolution, the Iranian rial was the second strongest rial after the Omani rial. Now, the exchange rate of each Saudi or Qatari rial is equivalent to more than 210,000 Iranian rials, and the value of the Omani rial is equivalent to two million Iranian rials.