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New currency introduced by the Parliament of Iran to combat inflation

New currency introduced by the Parliament of Iran to combat inflation

Iran has changed its national currency from ‘Rial’ to ‘Toman.’ The change has been brought by amending the Monetary and Banking Act of Iran on 4 May 2020.

Key Points:

  • The amendment makes the existing currency of Iran’ Rial’ valid in addition to the ‘Toman’ for 2 years.
  • The 2 year’s time has been kept to allow the central bank to introduce a new currency.
  • The new currency is equivalent to 10,000 rials and saw the reduction of four zeros. The new currency has been introduced amid rising inflation and fall in the value of Iranian currency against the U.S.A. dollar due to sanctions imposed by the United States of America.
  • The plan to remove four zeros was in place since 2008 but acquired support when the President of the U.S.A. Donald Trump exited Iran’s 2015 nuclear deal in 2018 and again imposed sanctions, resulting in the loss of over 60 percent in the value of the rial.
  • The change in the currency will enable the sanctions-hit nation to offset the inflation caused as a result.

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