Iran Approves Plan to Slash Four Zeros from Rial Currency

In a significant economic move, Iran’s parliament on Sunday approved a plan to remove four zeros from the national currency, the rial, a measure aimed at simplifying transactions as the currency faces steep depreciation.

Under the plan, 10,000 current rials will be replaced by one new rial. Both the old and new currency will circulate side by side for up to three years, while the central bank has been given two years to fully implement the transition.

The redenomination proposal, first suggested in 2019, was revived recently amid growing economic pressures. The rial has been losing value rapidly, reaching approximately 1,115,000 to the US dollar on Sunday, compared with around 920,000 in early August when the plan was reintroduced.

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The currency crisis comes after Britain, France, and Germany invoked the “snapback” mechanism to reimpose United Nations sanctions on Iran, targeting the country’s nuclear activities. This has intensified the pressure on the rial, pushing its value to repeated record lows on black market trackers.

In daily transactions, Iranians commonly drop one zero from the rial, using the resulting figure called the toman. The upcoming redenomination aims to simplify such calculations and make the currency more manageable in everyday life.

Before the plan can take effect, it requires approval from the Guardian Council and the signature of President Masoud Pezeshkian. If implemented smoothly, the move could ease transactional confusion and signal a step toward stabilizing the national currency in a challenging economic climate.