Iran has moved a step closer to knocking four zeroes off its currency, after economic woes pushed the value of one US dollar to almost a million rials.
The change would mean 10,000 rials would become one, making trading simpler. It was backed by an economic commission of Iran's parliament on Sunday, but still needs approval from higher authorities.
The commission also backed keeping the name rial instead of changing to the toman – which currently refers to 10 rials. The redenomination was first mooted in 2019 but then shelved. Iran's central bank governor Mohammad Reza Farzin said he would pursue the plan in May. He said the Iranian rial “does not have a favourable image” in the global economy.
The move comes as Iran faces deepening economic challenges, including runaway inflation, a sharply devalued currency and the prolonged impact of sanctions. US President Donald Trump has reinstated a policy of “maximum pressure” on Iran, which also suffered heavy damage during a 12-day war with Israel in June.
As of Sunday, the rial was trading at around 920,000 to the US dollar on the street market, according to local media and a website called Bonbast that monitors unofficial exchange rates.
Turkey knocked six zeroes off its currency, the lira, in 2005, after years of high inflation. Zimbabwe once removed 10 zeroes, turning 10 billion dollars into one after hyper-inflation ravaged the economy.
In June, Iranian politicians approved the new Economy Minister Seyed Ali Madanizadeh after his predecessor, Abdolnaser Hemmati, was ousted in a no-confidence vote for failing to address the country's economic woes.
The current bill will have to pass a parliamentary vote and gain the approval of the Guardian Council, a body empowered to vet legislation. It is not known when that will happen.
