Iran’s parliament has voted to slash four zeros from the national currency, the rial, to fight hyperinflation caused by crippling U.S. sanctions and the coronavirus pandemic.
Lawmakers also decided on May 4 that the rial, which has been Iran’s national currency since 1925, wiil be replaced by the toman, which will be equal to 10,000 rials, according to the IRNA and ISNA news agencies.
President Donald Trump in May 2018 withdrew the United States from a landmark 2015 nuclear agreement between Iran and world powers under which Tehran pledged to curb its nuclear activities in exchange for sanctions relief.
Washington then reimposed most sanctions on Iran, dealing a hard blow to the Islamic republic’s economy.
In recent months, the rial has shed more than 60 percent of its value, with hyperinflation also accelerated by the economic consequences of the coronavirus outbreak. Iran is one of the countries worst hit by the pandemic.
The law must be ratified by the Guardians Council, a powerful hard-line constitutional watchdog.
State television said Iran’s Central Bank will have two years to “pave the ground to change the currency to the toman.”
The Iranian currency was trading at about 156,000 rials per dollar on the unofficial market on May 4, according to foreign-exchange websites.