Iranís president sent a bill to Parliament Wednesday that would cut four zeroes from the value of the Islamic Republicís sanctions-battered currency, the rial, as tensions remain high between Tehran and Washington. By sending the bill to lawmakers, President Hassan Rouhaniís government shows it is serious about an idea mulled for some time in Iran, where people discuss monetary transactions in both rials and - informally but more commonly - in tomans. A toman is worth 10 rials.
If passed by Parliament and approved by lawmakers, Iranís Central Bank would in effect devalue the rial and rename it as toman.
The bank would have two years to create the new toman currency, returning a currency name that has not been officially used since the í30s. Authorities have given no estimate for the cost of creating the new currency. Also, it was unlikely the Parliament would take up Rouhaniís request anytime soon. The request carried a low-urgency level, meaning Parliament has up to two years, or until 2021, to deliberate and possibly approve the bill.
However, Iranians are to hold new parliamentary elections in March 2020, making it likely that the bill would be decided on by the next house and Rouhani may not see the new currency before the end of his presidency in 2021.
Nasim Souran, a Tehran-based financial journalist, told the Associated Press the proposal was part of Rouhaniís policies to help the nation deal with increasing prices.
ďThis move can psychologically affect the lower-class people because they might feel that the value of their money has shrunk,Ē said Rahman Fatehi, 54, who works in a restaurant in Tehran. ďThatís the psychological impact in my opinion but it wonít negatively affect the economy. In fact, the current situation will remain unchanged.Ē
A 46-year-old Tehran resident, Ali Bagheri, believed that the bill will not change anything. ďNothing will change [in the economic situation] by knocking off zeros from the currency,Ē he said. ďNothing will change by reviving coins in transactions.Ē
Iranís rial has been battered by escalating U.S. sanctions on the country since President Donald Trumpís decision to pull out of Tehranís nuclear deal with world powers over a year ago.
The rial traded 116,500 to $1 Wednesday. In 2015 the rial traded 32,000 to the dollar.
As uncertainty over the Iran nuclear deal grew after Trump entered the White House, Iranís already anemic economy nosedived. The countryís monthly inflation rate is at 40.4 percent and the national unemployment rate is some 12 percent. Among youth, it is even worse, with around 25 percent out of a job.
In 2018, money-exchange shops shut down for five months under a government order as it tried to control the rapid rial depreciation.
It tried to enforce a government-imposed rate of 42,000 to $1 during that time.