Iran's ex-bank official announces effective currency denomination period

Finance Materials 11 May 2020 14:54 (UTC +04:00)
Iran's ex-bank official announces effective currency denomination period

BAKU, Azerbaijan, May 11

By Elnur Baghishov - Trend:

Removing 4 zeros from the currency of Iran can be effective only if the economy in Iran is stable former managing director of Saderat Bank Ahmad Hatami Yazd told Trend.

According to Yazd, at the same time, there should be no inflation and currency appreciation in Iran and no sanctions should be imposed on Iran. He added that in the absence of all this, the denomination of the currency and the removal of 4 zeros from the currency will not solve any of the problems of the Iranian society.

The former official said that the issue of removing zeros from the currency is not a new step. In this regard, a project was put forward during the government of Mahmoud Ahmadinejad (was in power from 2005 to 2013).

The former official added that the project of denomination and removing four zeros from currency in Iran has been approved by the parliament and its implementation is useless.

"As for the execution of the denomination of the currency, it does not matter whether it is done within 3 or 5 years. Because the government must take steps to ensure that inflation does not reach 40 percent and the currency does not depreciate," he said.

The former director said that with the removing of 4 zeros from the currency, calculations in companies, banks and relevant government agencies will be simplified.

"As for a number of countries cutting out zeros out of their currencies, some countries have taken this step despite economic stability. However, a similar step by some countries, such as Zimbabwe and Venezuela, has worsened the economic situation," he said.

The Iranian parliament decided to change the national currency from rial to toman and to throw 4 zeros from the currency on May 4, 2020.

According to the decision, the name of Iran's new national currency is toman, and each 1 toman is equal to 10,000 rials. There will be a parallel circulation of toman and rial for a maximum of 3 years. The Central Bank of Iran must take steps to implement this law within a maximum of two years.

The US imposed new sanctions on Iran in November 2018. Over the past period, the sanctions affected Iranian oil exports, more than 700 banks, companies and individuals.

According to the report of the Iranian Statistics Center, inflation was 34.8 percent in Iran in the last Iranian year (from March 21, 2019 to March 20, 2020).