Decoding Iran’s Currency Shift: Removing Zeros from the Rial

In a bid to tackle inflation and simplify financial processes, Iran’s Parliament has greenlit a proposal to eliminate four zeros from the rial. The Economic Commission’s approval sets the stage for the implementation of this redenomination once the Parliament and Constitutional Council give their final nod. Under the plan, 10,000 current rials will be equivalent to 1 new rial, which is then divided into 100 qirans. The objective is to ease transactions, accounting, and reduce the cumbersome nature of dealing with large figures due to the rial’s diminished value. The strategy is intended to make currency exchange calculations easier, for example, converting an exchange rate from 920,000 rials to just 92 new rials per U.S. dollar. This move is designed to simplify both numerical and verbal financial transactions. The value of the currency itself will remain the same. The move is being implemented against the backdrop of economic difficulties, particularly those stemming from US sanctions following the 2018 collapse of the nuclear agreement.