Region | Iran

Iran 'to lop off zeroes' from rial notes

Iran early this year launched its highest-denominated banknote yet, 50,000 rials or the equivalent of around $5.4.

  • Agencies
  • Published: 14:33 September 10, 2007
  • Gulf News

Tehran: Iran's central bank has been instructed to study the possibility of knocking three zeroes off the country's banknotes, whose value has been eroded by double-digit inflation, Iranian media reported on Monday.

The oil-rich Islamic Republic early this year launched its highest-denominated banknote yet, 50,000 rials or the equivalent of around $5.4. Previously, the largest note in circulation was worth 20,000 rials.

Gholamreza Mesbahi-Moqadam, a member of parliament and a member of the policy-setting Money and Credit Council, was quoted as saying President Mahmoud Ahmadinejad had ordered the central bank to look into the issue.

"Our biggest banknote is very weak against other countries' currencies and this brought a bad feeling among our people in psychological terms," Mesbahi-Moqadam told Fars News Agency.

"Iranian pilgrims who used to go to Mecca for the Haj could exchange 10,000 rials for 500 Saudi rials but now they only receive four Saudi rials," he said.

He said the present situation also wasted time both for banks and their clients in handling and counting wads of money, as well as increased the cost of printing new banknotes.

Iranian media said the issue had been on the agenda in 2005 but was opposed by then Central Bank Governor Ebrahim Sheibani, who was replaced by Ahmadinejad last month.

The Central Bank was not available for comment.

Another Iranian news agency, Mehr, said it could take two years to implement the change, if it was approved.


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