Iran to Change National Currency

Iranian President Masoud Pezeshkian has submitted a draft law to parliament regarding the transition to a new national currency, the toman, which will replace the rapidly depreciating Iranian rial. This was reported by TASS.

It is noted that a key part of the monetary reform should be the denomination of the national currency at a ratio of 10,000:1. The draft law, which was presented to lawmakers today, had previously been approved by the government back in July 2019 when Hassan Rouhani was the president.

The Iranian authorities believe that the denomination should be carried out as soon as possible. The reason is the unprecedented fall in the market exchange rate of the Iranian rial, which, on December 19, reached a historic low of 777,000 rials to 1 US dollar. At the same time, the official exchange rate set by the Central Bank of Iran has remained almost unchanged since 2017, at 420,000 rials per dollar.

This creates serious challenges for exporters, who are forced to convert dollars earned abroad at the official exchange rate in rials.

The weakening of the Iranian currency is associated with geopolitical tensions, the adverse impact of Western sanctions against Tehran, as well as the ongoing energy crisis in the country, which has worsened during the cold season.