Iran plans to drop three zeros from currency

Iran plans to drop three zeros from currency

Sunday, April 03, 2011



The Islamic Republic News Agency reported Saturday that Iran planned to drop three zeros from the currency weakened steadily despite many years of policy linked to the dollar.

The official news agency IRNA quoted economy Minister said the Government hoped to amend the categories of the real-dollar more than 10,000 rials to the dollar over the next year.

Shamseddin Hosseini told the agency that Iran "would eliminate three zeros from the currency this year subject to prerequisites.

The Declaration coincided with major economic challenges facing Iran are continuing emphasis of the policy of sanctions and reduce support which kept for years prices of basic products such as food and energy artificially low

And insists the Government of President Mahmoud Ahmadinejad that sanctions are not impressive, but businessmen and analysts say it will affect foreign investment in oil and gas industry of Iran, task and make it difficult for companies to take advantage of international banking and threatening economic growth.

Ahmadinejad says that reform support will lead to a sharp increase in inflation. Within steps of the price of gasoline subsidies for seven times in one night in December and there had been a sudden increase in utility bills.

And inflation has increased steadily since the lowest level in 25 years at 8.8 percent in August, reaching 11.6 percent in February. But many consumers and politicians question the Government's statistics and appreciate the real inflation much higher levels.

Declining Rial 13 percent against the dollar over the past five days in September, prompting some analysts to wonder if they witness a deliberate reduction of value or thafta on the dollar for fear of scarcity of hard currency in the country with financial penalties. Central Bank intervention and then returning the riyal to its previous level...


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Redenomination of Rial: Four Zeros, Not Three

Apr 6 2011



After the announcement on Sunday by Iran minister of economy that the government intends to redenominate the currency by removing three zeros, today the governor of the Central Bank of Iran (CBI) told reporters that the intention is to remove four zeros, and not three, making one rial approximately equal to one dollar. The CBI governor said the legislative framework for redenomination of the currency would be readied within six months. He said removing four zeros from the current unit would eliminate the need for CBI to print increasingly large denomination notes.

The reason given by CBI for the necessity of removing four zeros follow the logic offered by many of our commentators, including our own Amir Taheri, that the removal of zeros is for convenience. People would no longer need to carry large amounts of money with them, and that in practical terms there are already bank cheques in wide use that function as large denomination bills.

The critics point out that such drastic redenomination is usually a step taken after a period of high inflation is ended and there are no expectations for a period of renewed inflation, and Iran does not meet the criteria as the gradual removal of government subsidies are expected to create a long period of high inflation. besides, the establishment of electronic money transfer system renders large paper bills unnecessary.


Source: Iranian Press
Published: 6 April 2011
Site: feedproxy.google.com
Source by Date: Iranian Press-6 April 2011
Subject by Date: Iran-6 April 2011
MM-YYYY: April 2011
Subject: Iran

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