Iran says 4-zero cut from currency will benefit economy

Experts believe that cutting four zeros from currency approved by Majlis on May 4, will temporarily strengthen national currency, reduce cost of coining and printing banknotes and help improve the accountancy related tasks.

On May 4, Iranian lawmakers voted for the details of an amendment to the Monetary and Banking Act of Iran that would change the official currency from 'rial' to 'toman'.

Based on the plan, the process of changing the national currency will take place gradually.

As the plan had been prepared within two years, a three-year period has been envisaged for its stage-by-stage implementation.

Meanwhile, credibility of both rial and toman will be effective during the stage-by-stage transmission period.

An economic expert told IRNA on Tuesday that slashing four zeros from national currency has nothing to do with the inflation rate.

Meysam Radpour believes that such a move to change national currency is a neutral plan as it does not have any impacts on the values of currency and the commodities as well.

Further, the expert welcomed cutting four zeros of the national currency, saying it will help simplify the accounting task.

Making coin instead of printing banknote is another advantage of the plan because it reduces cost of printing, protecting and destructing banknote, the expert says.

Analysts believe that change in national Iranian currency will psychologically have positive impact on a short-term period.

In related developments, Governor of Central Bank of Iran (CBI) Abdolnasser Hemmati had already said that keeping the prestige of national currency is high on the agenda.

Based on the experts' opinion, change of national currency will create an opportunity for improved models to be adopted for economic development.

Those experts also believe that cutting four zeros from Iran's national currency is a big step to implement useful reform in accounting formats.

In line with approval of a bill on shift of national currency from rial to toman, the Central Bank of Iran undertakes to fulfill preparatory works for implementation of the new law within two years since taking effect.

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