Iran's Currency Makeover from 'Rial' to 'Toman'.
Iran’s currency devaluation and significant high inflation forced the government to replace rial and introduce the re-denomination.
Iran’s Parliament “Iranian Majles” has passed a bill to change the national currency from the ‘rial’ to the ‘toman’. This move comes after a sharp fall in the value of currency due to the crippling US sanctions.
This amendment bill allowing the government to slashing four zeros from the ‘rial’, and authorizing to introduce ‘toman’ as the new national currency, whose value will be equal to 10,000 rial. The slashing four zeros was a necessary step to simplify the financial transactions.
However, this bill needs to be approved by the Guardian Council, a body of consecutive clerics that supervises the Parliament. The Guardian council have 12 members council that wields considerable power and influence in the Islamic Republic of Iran.
The idea of slashing 4 zeros from rial was introduced since 2008, but it gained strength after US exited Iran’s nuclear deal in 2015 and re-imposed sanctions. The rial value depreciated by 60%.
This depreciation has made rial, a weaker currency and high inflation rate in Iran. Iran’s weak currency and high inflation have led to sporadic protest since 2017. Currently, The Iranian currency is trading at about 42,105 rials per US dollar.