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Iran to delete 4 zeroes from the national currency


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Delete 4 zeros from the Iranian currency between truth and illusions

Delete 4 zeros from the Iranian currency between truth and illusions

 

The Iranian government announced on Wednesday its decision to delete 4 zeros from the Iranian currency and adopt the Toman instead of the riyal as the official currency of the country.

 

The government's decision to approve the proposal of the Central Bank, which is still awaiting the approval of Parliament and then the Guardian Council, and then President Hassan Rowhani.

 

What does it mean to delete zeros?

 

At the beginning, the Iranian Toman is equivalent to 10 riyals, and after the collapse of the currency, the price of one dollar on the black market reached 120 thousand riyals (12 thousand Toman).

 

The deletion of 4 zeros means that the 10 thousand riyals for example will equal 1 Toman.

 

Reasons for decision

 

This is not the first time that Iran has taken the deletion of zeros from the currency. Last year a similar action was taken in 2017.

 

Tensions over the nuclear issue between Iran and the United States have caused the collapse of the Iranian currency, which lost more than 320 percent of its value in just three years, following the withdrawal of US President Donald Trump from the nuclear deal and the imposition of devastating economic sanctions on Tehran, where the dollar reached 193 thousand riyals. Its highest price against the Iranian currency last year.

 

Economic pressures have also brought the rate of inflation to a historical average of 48%, according to official statistics, where the price of 1 kilo meat to about one million Iranian riyals, and Iran stopped dealing with coins, and the citizen has to carry large amounts of banknotes to buy Simple products.

 

The objective of the decision and its impact on the economy

 

The Iranian government aims to reduce spending on paper printing, re-use of coins, maintain currency efficiency and facilitate local monetary transactions.

 

"The government has passed a bill to delete four zeros from the currency and the two currencies will be our national currency, which will make the national currency more effective and will be more in line with a common practice. Real is not used very much, and the coins will be traded again," said Ali Rabie, spokesman for the Iranian government. "He said.

 

The central bank governor, Nasser Hamati, has announced that there will be a new currency market. "The new system will be a regulatory role and not specific to the foreign exchange rate, and will be known as (the multi-market), and will be aimed at crystallizing realistic prices of foreign currencies, The new foreign exchange market, which is expected to start operating by August 12, will bring transparency to the offer of foreign exchange securities. "

 

The Iranian government also aims to create false psychological effects on its currency, which it believes to be more powerful. Although the deletion of zeros does not really add to the strength of the currency unless it is accompanied by economic measures and reforms that support the local currency, such as attracting foreign investment and providing sources of foreign exchange

 

With Iran's economic isolation due to sanctions, the removal of zeros will not make a difference in the country's economic situation.

 

But it is also possible to say that there is a slight change expected to occur in one case, that Iran withdraw the local currency from the market and print new money and then pump it to local markets, in order to reduce the amount of banknotes in the market, which is reflected in some way on the value of the currency, But this is a huge shift and costs a lot.

Edited by DWS112
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15 minutes ago, pokerplayer said:

* BANG * there goes this Investment.  :(  Oh well as with anything it was worth a try.

 

  Thxs DWS112

 

  pp

 

i dont understand pp, which investment are u talking about ...

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20 minutes ago, fancy said:

Interesting currency news lately.  China just devalued theirs.

 

https://www.politico.com/story/2019/08/05/trump-blasts-china-yuan-drop-as-currency-manipulation-1634502

 

Just as interesting is the drop in the global market. Have you checked our stock market numbers this morning? Not pretty. But "trade wars are easy to fix."

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Asia & Pacific Markets plunge after China lets currency fall to a decade low in payback against Trump’s tariffs

 
By Gerry Shih and Taylor Telford August 5 at 9:50 AM BEIJING — China mounted a counteroffensive Monday to new U.S. tariffs by allowing its tightly controlled currency to slide to an 11-year low, a move that could further provoke the ire of President Trump, who believes that Beijing unfairly suppresses the value of the renminbi to bolster Chinese exporters at the expense of the United States. 
 
The Chinese currency on Monday punctured the 7 renminbi-per-dollar floor that had not been broken since 2008. The central bank, the People’s Bank of China, downplayed the significance of the milestone but said the rate drop was related to the dispute with Washington. 
 
The currency move came after Trump announced new tariffs Thursday on $300 billion in Chinese goods, effectively escalating the trade war with no end in sight. Trump accused Beijing of “currency ma nipu la tion.” He also appeared to call on the Federal Reserve to do more to prop up the economy. “China dropped the price of their currency to an almost a historic low. It’s called ‘currency ma nipu la tion,’” Trump tweeted Monday. “Are you listening Federal Reserve? 
 
This is a major violation which will greatly weaken China over time!” Global markets fell on the fraying relationship between the world’s two biggest economies. U.S. markets were set to plunge at the opening bell Monday. 
 
Fresh off the worst week of 2019, the Dow Jones industrial average was down more than 530 points, or 2 percent, in mid-morning trading. After tumbling last week, the Standard & Poor’s 500 was off by 62 points, or 2.1 percent, and the tech-heavy Nasdaq was down nearly 215 points, or nearly 2.7 percent. Trade bellwethers Caterpillar and Boeing were down 2 percent. 8/5/2019 Markets plunge after China lets currency fall to a decade low in payback against Trump’s tariffs -  Europe was down across the board, with the London-based FTSE 100 down more than 2 percent, followed by France’s CAC down 1.9 percent. The pan-European Stoxx600 was down 1.88 percent in Monday trading. 
 
The drops come on the heels of the worst week of stocks of the year in the United States. If history is a guide, it is going to get worse. August is historically one of the worst months of the year for stocks. Unlike some currencies whose values are freely dictated by supply and demand, China’s central bank sets a daily target price around which the renminbi, also known as the yuan, can fluctuate. The bank steps in when the price strays too far. 
 
For a decade, it has not allowed the renminbi to fall below 7, which financial markets consider a psychologically important threshold. “Influenced by unilateralism, trade protectionism and tariff expectations imposed on China, the renminbi has depreciated against the US dollar today, breaking through 7,” China’s central bank said in a statement on its website. China’s central bank said it was confident it could keep the currency at a “reasonable and balanced level.” The cheaper the renminbi relative to the U.S. dollar, the more attractive Chinese exports seem to Americans and the more expensive U.S. exports become to the Chinese, thus tilting the balance of trade. Trump has long complained that the renminbi is too weak and the dollar too strong. He has lobbied the Federal Reserve to cut interest rates to help U.S. exporters and boost the U.S. stock market. China, for its part, has argued that it has kept its currency at a reasonably high level to assuage U.S. concerns. 
 
It has also feared that a tumbling currency could spark panic about its slowing economy and trigger an outflow of capital. Trump’s latest tariff escalation, which the president announced Thursday on Twitter, sparked a rush of state media commentary suggesting that the Chinese government was caught flat-footed. State media lashed out at the United States on Sunday, accusing it of negotiating in bad faith and suggesting that Beijing may hold out from negotiating further with the Trump administration. 
 
On Monday, propaganda authorities unveiled a new commentary series to boost popular confidence in the economy and a sense of self-reliance. “Some people in the United States have reneged on agreements and broken the basic principles of international exchanges and conduct,” said an authoritative editorial by the People’s Daily, the Communist Party mouthpiece. 
 
It which pointed out that Trump raised tariffs 27 hours after the White House released a statement calling the most recent round of talks “constructive.” The drop in global stock prices in recent days, the commentary said, could be blamed “on the tyrannical capriciousness of certain people in America.” Beijing appeared to mount other forms of retaliation on Monday. 
 
The government has asked state-owned firms to stop their U.S. agricultural purchases, according to a Bloomberg report Monday that was widely cited by Chinese media. The crop purchases, which came from states that comprise Trump’s political base, were supposed to be a sign of Chinese goodwill as trade talks progressed. Late Monday, China’s state broadcaster aired an interview with a top economic policy official who denied that China was breaking its promise of buying U.S. agricultural products. But some of the products China agreed to buy were “not able to enter the Chinese market,” he said, because they were too expensive due to the trade war and “lacked competitiveness.” 
 
 
As the dispute drags on, analysts are wondering whether China could set off a new phase of an all-out currency war by simply ignoring U.S. pressure and allowing its currency to plunge. That could be a powerful trade weapon against Washington, but it would also exacerbate the flight of capital from companies and elite Chinese looking to shuttle their wealth out of the country, which Beijing has sought to stem for years. 
 
Still, some Chinese analysts wondered Monday whether the yuan could fall an additional 40 percent, to as low as 10 per dollar. “The first question, at this point, is whether China wants to weaponize its currency to retaliate in a messy trade war. It remains arguable,” Commerzbank economist Hao Zhou wrote in a research note. But because China has kept the floor at 7 for so many years, Monday’s breach could set off a “wave of depreciation” among Asian currencies and roil the financial markets, Hao observed. 
 
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9 hours ago, pokerplayer said:

* BANG * there goes this Investment.  :(  Oh well as with anything it was worth a try.

 

  Thxs DWS112

 

  pp

 Oh well. Now I have some really cool looking souvenirs  with some foreign dudes face on them. 😎

 I just hope the rest of the monopoly money I own doesn’t go the same way. 

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9 hours ago, Carrello said:

Iraq is also a completely different country with completely different issues going in a completely different direction.

 

In a nutshell.....:twothumbs:

 

Let's go people....

:rodeo:

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But it is also possible to say that there is a slight change expected to occur in one case, that Iran withdraw the local currency from the market and print new money and then pump it to local markets, in order to reduce the amount of banknotes in the market, which is reflected in some way on the value of the currency, But this is a huge shift and costs a lot.

 

unkess hey have printed a new currency waiting on wings, which is possible the the rial could be here to stay until we see a guardian council,approval and more comments from their majlis, it’s not over until the fat slapper sings.!

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Although the deletion of zeros does not really add to the strength of the currency unless it is accompanied by economic measures and reforms that support system" rel="">support the local currency, such as attracting foreign investment andproviding sources of foreign exchange...iran has an exchange platform in Dubai recently as well as in iraq. They have already stated the foreign market exchange will start on Aug 12 from this statement:The new foreign exchange market, which is expected to start operating by August 12, will bring transparency to the offer of foreign exchange securities. "

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