Iran: New Currency introduced to tackle Inflation
The Iran Government has recently come up with the decision of changing the name of the its currency to toman. The unit of Iranian currency if Rial. According to the Iranian Government, one Toman is 10,000 rials.
Highlights
Gheran is another new denomination. 100 Gheran makes a Toman. The new system was authorized by the Iranian Parliament recently to manage high inflation in the country. In order to make Toman, the four zeros in the older currency notes are alone removed. Rial will still remain legal.
Devaluation of the currency
The Iranian Currency faced devaluation during four major key points namely
- Islamic Revolution of 1979. Many entrepreneurs and business giants left the country when the government of Western-allied Shah had collapsed in 1979. They left the country due to the fear of execution
- End of Iran-Iraq war in 1989. After the war ended, it took 8 years for Iran to rebuild its shattered economy. During this time, Rial lost around 100% of its value as compared to the US Dollar.
- Tenure of President Ahmadinejad. Iran was slammed with international sanctions during his reign. Rial lost its 400% value in the global market. Ahmadinejad left his power in 2013.
- US pulling out from Nuclear Deal. This was the heaviest blow to the Iranian currency. The currency became 600% weaker than the US Dollar.
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Month: Current Affairs - May, 2020