Banknote Production

Iran follows in North Korea’s footsteps, plans to redenominate currency

Iran plans to remove zeros from the rial to make its value "real" and combat inflation.

Iran plans to remove zeros from the rial to make its value "real" and combat inflation.

A little over a month after the turmoil caused in North Korea by the redenomination of their currency (read: North Korea Changes Currency and Rates 100 to 1), Iran has also announced a similar plan.

Iranian president Mahmoud Ahmadinejad said the country would “remove zeros from its national currency, the rial, in order to make its value ‘real,’” Reuters reported Wednesday.

“We are supposed to remove zeros (from the rial) to make its value real,” Ahmadinejad said. “We have to return its value to the one existing in the law,” he said, without elaborating.

Ahmadinejad has been criticized during his presidential terms for being unable to control soaring inflation rates that have plagues the country for decades. Thirty years ago, one rial was worth about $1US while today, it takes 10 thousand rials to be worth $1US.

In December, North Korea redenominated its currency at a rate of 100:1 and limited the amount of banknotes its citizens could exchange in state banks. Markets were shut down for a week while the exchange took place, and several South Korean reports say that protest and violence were rampant.

Prior to this announcement, Iran has also been struggling with its attempts to remove anti-regime graffitied currency from circulation (read: Iran Deems “Green” Banknotes Invalid).

The redenomination of the Iranian currency is expected to begin in April.

SOURCES:
Reuters: “Iran plans to lop off zeros from currency: Ahmedinejad”
Trend Capital: “Iranian president hopes to denominate currency”
Islamic News: “Iran is going to denominate the national money”

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