Baku, Azerbaijan, July 25
By Farhad Daneshvar – Trend:
Iran is gearing to switch its national currency back to toman from rial, but the move aimed at ending the reign of rial appears to be incapable of having any serious impact on the country’s inflation rate.
Bijan Bidabad, a well-known economist and a former senior advisor at bank Melli Iran, told Trend that in general changing the currency would produce no significant effect on the economy but it only could contribute to facilitating the accounting procedures.
Meanwhile, Alireza Kadivar, a financial analyst and deputy head of Iran’s Novin Investment Bank, also believes that the switch would facilitate the transactions by the public.
Elaborating on the country’s economic situation of the Middle Eastern nation, Kadivar told Trend that the value and the purchasing power of Iran’s national currency over the past decades have considerably dropped due to the growing inflation rate and eventually the prices of the goods and services have dramatically surged.
The inflation rate in Iran for the first time over the past 26 years eased into single digits bottoming out at 8.6 percent last June, though data by the country’s Central Bank for the 12-month period to the third calendar month ending June 21 has shown that the figure hit 10.2 percent.
Kadivar further mentioned that Iranians in their daily transactions have used the toman for a long timeç as the people find it to be more user-friendly than rial.
“The most important outcome of the decision would be recognizing the toman as the official currency that the nation over the past decades preferred to use,” he added.
The expert also played down the rumors suggesting that the issuing of new banknotes could bear huge costs.
“The decision would be implemented gradually in a long term, therefore there will be enough time to replace the old banknotes with new ones,” he noted.
The incumbent government in a cabinet meeting on Sunday evening passed a bill on switching the official currency to the toman after almost 90 years. Under the new bill, one toman will be worth ten rials. The switch to the toman means that one zero would be removed from price figures in the country.
The government’s proposal still needs to be approved by parliament and the country’s constitutional watchdog body of the Guardian Council in order to become a law.