ERBIL, Kurdistan Region - Iran’s top vetting body on Sunday approved a parliamentary decision to slash four zeros from the national currency, state media reported. The move aims to simplify financial transactions as Tehran struggles with a severely devalued rial that has recently traded at over 1.1 million per US dollar on the free market.
The Guardian Council - which serves as the final arbiter of whether parliamentary laws comply with Sharia law and the constitution - approved “the bill to delete four zeros from the national currency,” said Hadi Tahan Nazif, spokesperson of the Council, as quoted by the state-run Iranian news agency (IRNA).
“The process of deleting four zeros from the national currency will thus begin, and a multi-year transition period has been anticipated for its implementation,” Nazif said.
The parliament voted in October to amend the Monetary and Banking Reform Bill in order to remove four zeroes from the rial and the currency will be officially changed to the “new toman,” equal to 10,000 rials, Fars News Agency reported at the time.
The legislation mandates the central bank to oversee a three-year transition period to phase out the old currency. The bank will also be responsible for setting foreign exchange rates.
The move follows months of severe depreciation of the rial, which has traded at record lows on the free market amid chronic inflation - hovering around 40 percent - and the impact of crippling international sanctions and monetary mismanagement.
For decades, Iranians have dropped a zero from the rial in conversation, referring to denominations in tomans, where one toman equals ten rials. Economists argue that the latest reform does little to address Iran’s deeper structural economic issues.