On May 04, 2020, Iran, recovering from the horrific outbreak of Coronavirus (COVID-19), has now started efforts to get its economy back on track. In this sequence, the parliament of Iran has approved a bill on national currency denomination, which allows to cutting four zeros from its national currency Rial & to rename it as ‘Toman’ which is equal to 10,000 rials.
It has taken this major decision to prevent a major fall in currency due to US (United States) sanctions.Key Points:
i.Now this bill will be presented before the committee headed by Iran’s supreme leader Ayatollah Khamenei for approval & the Central Bank of Iran- CBI(also known as Bank Markazi) will be given two years to change the currency.
- The discussion in Iran about removing 4 zeros from the currency has been happening since 2008 but its demand had increased sharply after 2018 when US President Donald Trump decided to pull out of the 2015 nuclear deal with Iran.
- After this, the US imposed large-scale sanctions on Iran. This led to a fall of up to 60 % in the Iranian currency. According to foreign exchange websites, the Iranian currency is at the level of 156,000 against the riyal per dollar. The country also witnessed large-scale violent protests in late 2017 due to weakness in Iranian currency and increased inflation.
- Significantly, the tension between the US and Iran is at a peak & it has been further exacerbated when the US killed Iranian Major General Qasem Soleimani in a missile attack in 2019.
President– Hassan Rouhani