Page 31 - IRANRptJun20

Iran approves plan to remove four zeroes from ‘bloated’ rial and rename it toman
Iran’s parliament has passed a bill that permits the government to redenominate the Iranian rial (IRR) with four less zeroes and rename the currency as the “toman,” IBENA reported on May 4.
The Monetary Reform and Banking Law bill stems from old ideas revived by Central Bank of Iran (CBI) governor​ ​Abdolnasser Hemmati​. T​ he drafted legislation faced little resistance due to a general feeling of frustration at soaring inflation and practical complications—such as the need to carry thick wads of banknotes and calculate large sums—caused by the severe weakening of the rial against hard currencies since the US reimposed heavy sanctions against Iran in May 2018. As well as introducing the “toman”, officials are to bring forward the “parseh”, equal to 100 toman.
Colloquially in Iran, the toman represents 10 times the value of the rial and is the de facto currency used in daily transactions. For instance, IRR10,000 is known informally as Iranian toman (IRT) 1,000 with prices, for instance, typically stated in that way online.
“People talk in tomans and official centres report in rials. Removing four zeroes is a necessary step to simplify financial transactions,” government spokesman Ali Rabii said on May 3 in a social media post.
The approved bill must now go before a committee and the Guardian Council, which vets laws and suggests recommendations or alterations. Considering the urgency widely felt about the situation, it may be expedited through the official channels in a matter of months.
Dustin Furst, a Berlin-based Eurasia specialist, said of the move: “Fascinating. And late for such measures to actually be effective? Isn't this going to devalue the IRR when everyone tries to get as much foreign currency/gold for their Rials?”
The bill states that a two-year transition period would be needed to successfully move from the rial to the toman.
“After the transition phase, past liabilities based on the rial would be fulfilled only in toman,” the government added in its plans.
31​ IRAN Country Report June 2020 www.intellinews.com