Iran’s government debated changing the national currency, the rial, by basically slashing four zeros off its face value, an acknowledgment of how American sanctions and economic mismanagement have contributed to inflation in the country.
The move by the Iranian government aims to simplify financial transactions. Once the law is ratified, the Central Bank of Iran will have two years to implement the change.
The rial and the new currency is expected to overlap for between two to five years in the market. The new system was authorized to manage high inflation in the country.
In 1930, Iran changed its basic monetary unit from dinar to the rial. The change was a part of the modernization of the economy undertaken by the Pahlavi dynasty, which was overthrown by the revolution in 1979. The Iranian government has been planning to replace currency notes since 2016.
