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The Iranian Central Bank: We have reached better methods of providing foreign exchange and selling oilBy DWS112
This is the history of the currency in Iran .. Why Tehran will delete the zeros from its banknotes?
For decades, governments of many countries have benefited from the benefits of deleting zeros from their local currencies, to facilitate their use among people, reduce printing costs, control inflation and strengthen the position of the local currency among countries.
After rounds of negotiations over the years, the Iranian government approved a proposal by the central bank in January this year to remove the four zeros from the local currency, and the proposal was submitted to the Iranian parliament for approval.
Since the reign of the Achaemenids to date, more than 50 different currency types have been used in Iran, such as the Achaemenid Drake, the Dirham, the Sassanian dinar, the Shah, the Abbasid Safavid, the Toman, and the Qajar Koran to the current rial and dinar.
According to the first article of the banking monetary law adopted since 1972 in Iran, the official currency of the country is the Iranian rial, which was replaced by the Toman in the Pahlavi state in 1929 and continued to this day, where one riyal consists of one hundred dinars.
Although the name of the currency has changed to the riyal, the Iranian people still call their currency "Toman" in their purchasing business. The use of the riyal name is limited to banks and official institutions in Iran.
But according to the central bank's plan, the toman would become the official currency of Iran as an alternative to the rial. Four zeros will be deleted from the official currency.
Toman Original currency
The Toman will become the original currency of Iran, while the riyal remains the sub-currency, each 100 riyals constitute one toman.
For its part, the Central Bank announced the start of the process of collecting used money and exchange of new money within 24 months after the approval of Parliament.
"The value of the Iranian national currency has fallen by 3,500 times since 1971, and the exchange rate of the Iranian riyal against foreign currencies (the dollar) is 0.000008. In dollars. "
He added that there are currently seven billion banknotes in the country, but the number will fall to three billion after the exchange of the riyal Altoman. This will facilitate trade and exchange between people and reduce the cost of printing money.
Opinions on the new plan were divided between loyal and opposition until the issue became controversial in Iran.
In their view, it is more feasible at this stage for the government to focus on reforming the country's economic system and reducing inflation, which has reached 40%, while the economic growth rate is 5%.
Similar experiences in other countries show that monetary change only achieves its objectives and desired results when economic stability is achieved. .
On the other hand, supporters believe that the most important features of the plan is to give the currency its real value.
The plan is characterized by reducing the size of banknotes and facilitate transactions and reduce the storage and maintenance space and save the banknotes better, and facilitate the process of carrying and transport, and reduce the psychological effects of inflation, and raise the currency between countries, and save time for people and banks at the same time, according to supporters .
Inflation and other things
says Ali religious Turkmen professor Tehran University and faculty member at Institute Studies and Research business in his speech to island "took this decision result continuous inflation years now which contributed zooms numbers."
He pointed out that the basic elements of currency stability and control of inflation are not achieved when changing the currency and deleting zeros, Turkey has a similar experience in the deletion of six zeros from its currency in 2005, but the plan would not have benefited the Turkish economy without Turkey's involvement in the European market and attract head Foreign money and the correct management of the economy.
He also said that this plan will not affect the purchasing power or people's property, and that the deletion of zeros will include money and goods at the same time, for example, the price of bread will become Tomanin instead of 20,000 riyals.
Similarly, for foreign trade or foreign exchange transactions, prices will remain the same, and the purchasing power of foreign currencies will remain unchanged with the new toman, he said.
In this sense, changing the currency and deleting its zeros is a double-edged sword for the Iranian economy. The success of the plan depends on the government's parallel economic reforms, to safely pass the thorny economic entitlement, otherwise it will sink into inflation again if it continues to deal with the old system and the same mentality four decades ago, observers say.
Iran to delete 4 zeroes from the national currency
11:37 - 31/07/2019 BAGHDAD - The
Council of Ministers of Iran in its meeting Wednesday, a proposal to delete 4 zeros from the national currency Riyal.
The governor of the Central Bank of Iran, Nasser Hamati, is due to present details of the new government decision later.
The official price of the US dollar is 42,000 riyals. Ending / 25
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