Seif: Currency switch poses no problem

Financial Tribune- Changing Iran’s monetary unit from rial to toman and the subsequent replacement of all banknotes with the new currency present no cumbersome challenge, the Central Bank of Iran’s governor said.

“This measure [of renewing the banknotes] causes no problem and it does not seem to entail much cost either because if the proposal is approved by the parliament, current banknotes can be used until the last moment,” Valiollah Seif said in a talk with Tasnim News website.

“New banknotes will gradually be printed in toman instead of rial and while the old notes are still in circulation, they can be used simultaneously. The rest is not complicated and can be resolved through directives, which show there is no cause for alarm.”

The government gave the green light to change Iran’s monetary unit from rial to toman in the Cabinet’s latest meeting on Wednesday, the approval of which by the parliament will lead to dropping one zero from the national currency.

On Friday, a deputy governor of the CBI confirmed that the move could entail a complete reprint of all Iranian banknotes.

“If the decision is approved by the parliament, it is possible that minor changes will be considered when new banknotes are printed at the beginning of the next year (in March),” Akbar Komijani added.

Seif pointed to the longstanding and much-discussed dialogue between experts and officials alike surrounding the proposal of lopping three or four zeroes from the national currency. He said the proposal remains on the table, regardless of the Cabinet’s recent decision and “should not under any circumstances be considered to be at odds with this matter”.

He added that although Iran has reached a level of economic stability compared with last year, time is not yet ripe to lop off more zeroes from the currency and “it could be implemented in the next one or two years”.

According to the CBI governor, changing the monetary unit is only a case of laws and regulations being tinkered to accommodate the “society’s norms”, to respect popular culture and provide mental ease to Iranians.

Toman has long been the currency of choice in daily transactions by citizens while rial (10 of which equal one toman) has been used as Iran’s monetary unit in official documents and budget statements. The new proposed plan effectively reverses the initial conversion from toman to rial established in 1932 and equates 10 rials with one toman.

Seif, who also heads the Money and Credit Council, said that is why when a regulation pertaining to the Central Bank Bill was being reviewed in the government, it included an article that stated that rial is the official monetary unit and equals 100 dinars.

“Therefore, the proposal was put forward to respect the overarching notion in society and based on that, the article was corrected in a way that now identifies toman consisting of 10 rials as Iran’s official monetary unit,” he said.