...

Removing zeros from Iran's national currency effective if inflation stable - bank advisor

Business Materials 3 December 2020 09:40 (UTC +04:00)
Removing zeros from Iran's national currency effective if inflation stable - bank advisor

TEHRAN, Iran, Dec.3

Trend:

Removing four zeros from Iran's national currency would be effective, if the inflation rate is stable, said the banking advisor to Iran's Chamber of Commerce Mohammad Mahdi Raeszadeh told Trend in an interview.

"The government policy of removing four zeros from national currency is effective when there is a stable economy, liquidity is controlled and inflation rate is stable, " Raeszadeh said.

"Implementing the policy should be done when there is all the necessary infrastructure," he said.

"Countries that have removed several zeros from their currency were only successful when they could curb high inflation rate. Turkey, for example, has reduced the inflation rate and at that period removing 6 zeros has helped Turkey to have better transactions," Raeszadeh said.

"Russia has also eliminated a zero from its currency several times but was not successful in implementing this policy since its inflation rate was not stable. So, even after implementing the plan there were still many zeros on the national currency. The last time when inflation rate was controlled, the elimination of zeros was effective," he said.

"It is the same for our case, if inflation rate rises and people's purchase power doesn't improve, even after eliminating zeros, our suggestion is that first we should move toward establishing infrastructure and controlling inflation and stability of prices, and only then remove zeros," he said.

Iran’s parliament has recently passed a bill allowing the government to slash four zeros from the rial, Iran’s national currency, and settle for the name change as well (from rial to toman).

Tags:
Latest

Latest