Financial Tribune - Governor of the Central Bank of Iran says lopping off four zeros from the national currency will not impose additional costs on the government regarding printing banknotes.

“The initiative doesn’t incur additional costs as the government annually destroys and prints 700 million pieces of banknotes,” the parliamentary news website, ICANA quoted Abdolnasser Hemmati as saying.

Defending the policy in the key Majlis Economic Commission on Tuesday, Hemmati said seven billion pieces of banknotes are in circulation and could be reduced to 3 billion if the monetary unit changes.

The government on Wednesday approved a central bank proposal based on which four zeros would be shaved off and the official unit (rial) will be changed to the popularly used toman.

Among other things, the initiative aims to improve the value of the rial, facilitate transactions, cut the cost of printing banknotes and coins and enhance efficiency of the lethargic financial sector.

Hemmati said the policy is a positive response to whatever is popular among the people and the CBI strives to address the hopes and aspirations of the public.

“Truth be said, the people no longer use rial in their day-to-day transactions.”

He took stock of the decline in the value of the rial over 50 years, saying that the national currency has declined 3,500 times in value since then.

This is while the biggest legal tender, the 500,000-rial ‘Iran Check’ has grown 50 times in comparison to the biggest banknote (10,000 rial) half a century ago.