The Iranian government has approved a bill to slash four zeros from the current currency and redenominate it from rial to toman.
The cabinet passed on Wednesday the Central Bank of Iran (CBI) proposed bill that will slash four zeros from the current currency, called rial, which will be automatically named toman.
The bill aims to prevent further devaluation of national currency and help align the formal currency’s denomination with what the society is used to, according to the bill's features.
Although rial is the formal denomination of Iran’s national currency, prices are in toman (one zero less) and the society is used to trade in toman and not rial.
“According to the plan, the new national currency will be denominated toman in which one toman will be equivalent to the current 10,000 rials or 100 new rials,” according to a report.
If the project were implemented today, each dollar would be equivalent to nearly 12 tomans based on the Sana rate, which records the average daily currency trade across the exchange bureaux in Iran. Currently, $1 equals 11.980 rials.
Central Bank of Iran (CBI) Governor Abdolnaser Hemmati officially annoucned the measure early January. “A bill to remove four zeros from the national currency was presented to the government by the central bank yesterday and I hope this matter can be concluded as soon as possible,” he was quoted by IRNA on 6 January.
Tehran has been planning since 2008 to redenominate the national currency as it continued devaluation. Now, the government is pushing the plan forward following the drastic loss of the currency value after the restoration of economic sanctions on Tehran in 2018.