Mar 21, 2017: Rouhani government seeking to change national currency unit
IRAN - The Iranian fiscal year begins on the question of whether the administration of President Hassan Rouhani has been able to move forward on a controversial bid to change the national currency unit from the rial to the toman, which is equivalent to 10 rials.
According to Al Monitor, which reported on the government’s proposed currency reform, critics say it is a redenomination move for which the country’s economy is not yet ready. The Central Bank of Iran argues that the measure should not be confused with redenomination, a process of eliminating several zeros from the national currency. The bill needs to be ratified by parliament and then approved by the Guardian Council to go into effect.
The plan signals the government’s opinion that the economy, boosted by sanctions relief, is ready. Britain’s Economist notes that GDP is set to grow about 4.5 per cent in 2016, up from 0.4 per cent in 2015.
Al Monitor explains that the Iranian currency has lost significant value since the 1979 Islamic Revolution, largely due to galloping inflation. Iranians have long been using the toman rather than the rial as the main currency unit in everyday transactions, according to the regional publication. The toman was the national currency during the Qajar dynasty (1785-1925) and the early years of the Pahlavi dynasty (1925-1979). The rial only officially replaced the toman in 1929.