The Iranian parliament approved on May 4 that the official currency of Iran was changed from Rial to Toman, with 1 Turman equivalent to 10,000 rials. The Iranian parliament voted to pass the amendment to the Iranian Currency and Banking Law. The amendment requires the Central Bank of Iran to recalculate the exchange rate in Turman, considering the currency reserves and the commitment to the International Monetary Fund. The law also clearly stipulates that "rial" will maintain its credibility with "Turman" for two years. During this period, old coins and banknotes will be gradually collected and replaced with new coins and banknotes.

Two years later, the rial will be completely abandoned. Turman is the legal currency used by the country nearly 100 years ago, and each Turman will be equal to 10,000 riyals. In the case of IMF financing, the exchange rate is recalculated in "Turman".

Iran ’s current legal currency change is related to the sharp rise in domestic prices in recent years. The economic situation in Iran has become more severe due to the long-term US sanctions. Iran is following the footsteps of Venezuela in currency issuance. As early as September 2018, the new currency of Venezuela, Bolivar, was officially unveiled, erasing 5 zeros on the basis of old coins, and a one-time devaluation of 95%.

More than zero in Iran ’s current currency denomination is scary

Iranian rial is the currency name of Iran. The denominations of Iranian rial banknotes are 100, 200, 500, 1000, 2000, 5000, 10000, 20000, 50000, 100,000, 500,000, and even 1,000,000 rials. The coin face value is 1, 2, 5, 10, 20, 50 rials Yeah.

Iranian Central Bank Governor Hemat said on the 4th that the current Iranian currency denomination is more than frightening. The rial has depreciated due to accumulated inflation. The central bank must implement a currency reform plan as soon as possible. It is expected to be in 2 to 5 years. During the year, the rial will co-exist with the new banknote Tuman issued in the future.

According to Iranian media, the rial currently used in Iran has been adopted since 1930 and has been in use for more than 90 years. Since 1971, the value of the rial has depreciated by more than 3,500 times, and in order to save the "face value" of the rial, currency reform must be carried out.

Iran's plan to launch a new currency has been brewing for many years

The amendments passed this time are aimed at facilitating transactions, reducing the cost of printing banknotes and manufacturing coins, while improving the efficiency of the currency system.

The American Broadcasting Corporation reported that Iran ’s new currency, Turman, directly erased the four zeros behind the rial, but this move cannot change the plight of the serious devaluation of the Iranian currency. Iran has been subject to international sanctions for a long time, and the new coronary pneumonia epidemic has further impacted the Iranian economy and put more pressure on the exchange rate. Although the Iranian government implements strict foreign exchange controls, the black market in Iran's domestic foreign exchange is rampant. The current Iranian exchange rate is 42,000 rials for 1 US dollar, and the black market exchange rate is 156,000 rials for 1 US dollar.

In fact, Iran ’s plan to launch a new currency has been brewing for many years. As early as December 2016, the Iranian government announced that it will use the new currency Turman to replace the rial; in August last year, the Iranian government formally proposed a new currency. According to data from the Central Bank of Iran, there are currently 8 billion banknotes in circulation in Iran. Some analysts believe that the successive recovery of old coins and the issuance of new coins are also a significant cost for the Iranian government, which has always been financially strained. Editor / Huang Lijun