Iran cuts four zeroes from currency value

Four zeroes will disappear from the value of the Iranian currency and the name of the currency itself change, thanks to a new law by the Iranian parliament amid hyperinflation caused by US sanctions and the coronavirus pandemic.

The rial, Iran's currency since 1925, has recently lost more than 50 per cent of its worth, with inflation rising drastically as US sanctions, introduced in response to Iran's nuclear, military and regional policy, and the economic consequences of the pandemic bite.

It is now to be replaced by the toman, with 10,000 rials becoming 1 toman, according to state news agency IRNA. A euro is now officially worth 4.5 tomans, or 17 tomans on the free market, the agency said. The law must be ratified by the Guardian Council.

The toman was Iran's currency until 1925 and the term itself remained in use in Iran because conversion was easy: 10 rials were known as a toman.

Iran hopes that the new measure has a positive psychological effect on the market. Many Iranians have to pay more than a million rials for their weekly shopping. The move is also necessary for the implementation of banking reform.