The original proposal had been offered by the administration in 2016, which is now subject to a final seal from the Parliament and the Guardian Council. The cabinet’s second approval of the proposal on Sunday, therefore, paves the way for the official renaming of the currency unit, restoring it to what it used to be 88 years.
Earlier, some lawmakers had called for the immediate lopping off of several zeros from bank notes based on the model which Turkey conducted on its lira.
In response, the government has said that it is not seeking monetary reform and that the change is merely meant to facilitate the public’s financial transactions. The Central Bank has also made it clear that the plan does not include a reprinting of notes.
Commenting on the plan, the Manager of the Islamic Banking Department of Iran’s Monetary and Banking Research Center questioned the fashion in which the plan is set to be implemented.
Kamran Nadri told IBENA that the name of the currency had already been changed and used by the public for years. “The plan also creates problems in calculations and accounting, while it also needs the destruction of a huge amount of outdated notes and reprinting new ones,” he said.
Nadri expressed doubt that the new change will solve economic issues. He suggested that a removal of several zeros together would be of better implications in a monetary reform.
The economic expert added that a perquisite to such reforms is basic structural amendments in the entire banking and monetary system, which he said is currently grappling with a multitude of problems, among them inflation. Nadri indicated that the government should instead place more emphasis on tackling the inflation rate as a top challenge the country’s economy is facing.
