Iran: Another Currency Reform Soon?

[Bimat]

Iranian public votes on currency reform

Author: Catherine Snowdon

Preliminary results show name of currency will change and four zeros will be removed from value.

On Saturday, the Central Bank of the Islamic Republic of Iran launched a website allowing the public to vote on key decisions relating to the future of the Iranian currency.

The central bank sought public opinion on what the name of the currency should be: the choices being for it to remain the 'rial' as it is currently known, or to become either the 'toman', 'parsi' or 'derik'.

"We have had about 100,000 visits to the site so far, and 10,000 votes," said Payman Ghorbani, director of the economic research and policy department. "The results so far show that 46% of the voters prefer the name parsi."

The rial has just 2%, the derik has 13% and the toman 33%.

The central bank is as yet undecided on when they will call a halt to the vote, so there is time for this outcome to change.

In the online survey, the central bank also asked respondents how many zeros should be removed from the currency. The government has proposed cutting four zeros, and so far the public agrees, with 61% of votes.

"We are pleased to see our programme for reform is in accordance with public expectation," said Ghorbani.
Currently, the biggest Iranian banknote is 100,000 rials, which is worth $9.4.

The poll also asked the public about any anxiety regarding inflation if zeros were to be removed from the currency's value. Generally, the public seemed minimally concerned, with 28% saying they believed the change would have no effect, 29% saying there would be a slight effect and 24% said there would be an impact on inflation. Only 8% expressed any real apprehension about a big effect.

"Most people have a clear and right idea about there being no inflationary impact," said Ghorbani.

The central bank also quizzed people on their payment method preferences. A convincing 74% of votes so far show the public preferred e-payment methods, with 64% of respondents saying they carry out more than 30% of money transactions using electronic banking. Just 1% of participants preferred using personal cheques and 24% liked using cash.

In terms of the appearance of the new banknotes, so far 40% of voters have said they would like to see pictures of Iranian scientists, writers and poets on the notes.

The poll results will be taken into account when changes to the currency are finalised. "We believe that for the reform to be successful, the public should be a part of it," said Ghorbani. "We want to understand the public's concerns and give clear answers. On our website people can download information about the good experiences in other countries with redenomination and there are direct messages from the governor to the public."

If common questions arise out of the survey, the central bank will post the question and answer on the website, Ghorbani said.

In making final decisions about the reform, Ghorbani explained that different institutions will make decisions on the various elements. "The name will ultimately be decided at the highest level," he said. "The central bank will decide on the size of the banknotes and the materials used in the coins, the denominations and how much of each will be produced."

The central bank will also lead the process of transition, offering advice on adjustments to electronic payment systems. Voters have also been consulted on this topic, with the majority wanting to see a one-year period when the two currencies run alongside each other.

Source: Risk.net

[Ukrainii Pyat]

They have been bantering about lopping zeroes off of their currency for years now.  I like the idea of poets being on their money though, and think Muslih-ud-Din Mushrif ibn-Abdullah Shirazi, better known as Saadi, would be a more than appropriate choice - with the obligatory tulips.

And one of his quotes:

The children of Adam are limbs to each other, having been created of one essence.

[Bimat]

They have been bantering about lopping zeroes off of their currency for years now.  I like the idea of poets being on their money though, and think Muslih-ud-Din Mushrif ibn-Abdullah Shirazi, better known as Saadi, would be a more than appropriate choice - with the obligatory tulips.

I'm quite fond of Iranian coins as well as their banknotes; and some of them are really nicely designed. Extensive information about all the Iranian banknotes can be found here. (click on country index at the top). The website I mentioned is perhaps the best website dedicated to Islamic banknotes.

Aditya

[Magus]

Are they really going to decide on the basis of online polling?

Even if they want to go by popular opinion, an unscientific poll is hardly a reliable way to judge it.

[Figleaf]

Well, 10 000 hits and 10 000 votes sounds strange to me, but I am obviously not Iranian. I am sure the mullahs will be happy with the outcome of the vote, though.

Peter

[chrisild]

Those zeros can get confusing, not only when it comes to face values of banknotes. Make that first number 100,000. And no, I don't think the final decision actually depends on what web site visitors vote for.

Christian

[<k>]

Any news? 

[chrisild]

Any news? 

Look at the value of the 100,000 rial note (in July 2011) mentioned in the initial post. $9.40 ... and today it is about $3.70. Merely taking a few zeros off does not make much sense, I think.

Christian

[Enlil]

That currency is going the way of Venezuelas, redenomination will make it easier but not solve the financial problem. If they issue at 10,000 to 1 new rial, then it won't take long for that 1 rial to be worthless.

[Bimat]

Iran: Hello toman; good-bye rial

Iran's administration has proposed reintroducing the toman as the nation's official currency. It's to replace the rial, which has been around since the 1930s - but the toman has never really been dead.

Iran's news agency IRNA said Wednesday that President Hassan Rouhani's government had proposed changing the name and denomination of the country's official currency.

The report said the Cabinet approved a measure calling for a change from the rial to the toman. One toman would be worth 10 rials, meaning that a zero would de facto be removed from price figures.

A US dollar would currently buy 3,200 tomans at official exchange rates, and 3,900 tomans at unofficial rates.

End of confusion?

Parliament will have an opportunity to weigh in on the proposed change before it goes to the constitutional watchdog, the Guardian Council, for approval.

It's still unclear when new coins and bank notes will be made available. The toman was already in use in the country until the 1930s.

For tourists, the proposed return of the currency could provide an advantage. Until now, the rial has caused confusion for travelers as it was the official currency used at banks and hotels, but not among locals. They've never stopped referring to tomans to calculate prices.

Source: DW

[Bimat]

We have another entry for new series of coins and banknotes (possibly in 2017?)...

Aditya

[eurocoin]

We have another entry for new series of coins and banknotes (possibly in 2017?)...

Aditya

Well this has been going on since 2011 so hopefully it is finally going to happen.

[saro]

Interesting information, many thanks for it 
Did future coins &  banknotes will be written in farsi & french ? like this stamp of year 1881 :  a bilingual french/persian "1 toman" stamp showing its value in french Francs : 1 toman = 10 F so that "Poste Persane"

[Bimat]

Lawmaker Warns of Currency Change Cost

Thursday, December 29, 2016

Changing Iran's official monetary unit from rial to toman would cost a hefty 30 trillion rials ($922.7 million), announced the head of Majlis Economic Commission.

"Based on early estimates, at least 30 trillion rials must be spent to change the monetary unit and this is a very heavy cost. Therefore, any decision to remove one or several zeroes must be based on expert studies," Mohammad Reza Pour-Ebrahimi was also quoted as saying by Banker.ir.

During a Cabinet meeting in early December, the government approved changing Iran's monetary unit from rial to toman.

Rial is currently used in official documents and budget statements, although toman is the currency of choice for the Iranian people in daily transactions.

The parliament has yet to sign off on the plan which, upon implementation, would require the reprinting of all Iranian banknotes.

Pour-Ebrahimi's comments come on the heels of those made by Hadi Akhlaqi, the CEO of Bank Mellat–a major private bank, who claimed that the "costs [of printing new banknotes] will not be significant".

The head of the commission was critical of the plan's timing, asking, "If we are going to do this, why not do it in a way that it would not impose more costs a few years down the road?"

Pour-Ebrahimi was referring to the fact that for years, a proposal has been put forward to lop off three to four zeroes from the national currency.

As per the current plan , the monetary change will see one zero removed, but as mentioned by a number of pundits and officials, implementing a currency switch now and executing the earlier proposal a few years later would only bring about unnecessary costs.

Pour-Ebrahimi noted that a six-month period would be required to complete the monetary change.

More Zeros

"Therefore, it is our proposal that if the government wishes to change the monetary unit by removing one zero, it is better if it considers the matter of removing four zeroes that has already been the subject of various studies," he stressed.

The senior lawmaker spoke of the positive effect of removing three to four zeroes from the national currency, saying it will ease calculations and create a more positive sense with respect to the national currency's value against other currencies.

He stressed that removing one zero will have no significant impact on the economy.

Pour-Ebrahimi concluded by saying that the government can learn a thing or two from similar experiences of other nations such as Turkey in changing their monetary unit.

However, Ali Divandari, the head of Monetary and Banking Research Institute affiliated to the Central Bank of Iran, said the monetary change is "strictly a nominal change and removing zeroes is not being discussed".

Speaking at a press conference, Divandari added that the change would have zero impact on business transactions.

He also said because the rial "would not be removed" and will stay on as a lesser currency to the basic toman, there is no need to reprint banknotes "unless current notes get worn-out or with their gradual elimination from the cycle, banknotes with the new monetary unit will be printed.

Source: Financial Tribune

[Pabitra]

See
https://www.ynetnews.com/articles/0,7340,L-5441754,00.html