Iran General NewsIran plans to knock three zeros off currency: report

Iran plans to knock three zeros off currency: report

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ImageAFP: Iran plans to knock three zeros from its national currency, the rial, so it can recover value it has lost in recent years, President Mahmoud Ahmadinejad was quoted as saying on Wednesday. ImageTEHRAN (AFP) — Iran plans to knock three zeros from its national currency, the rial, so it can recover value it has lost in recent years, President Mahmoud Ahmadinejad was quoted as saying on Wednesday.

"We are due to remove zeros from the currency… because for some reasons the rial has depreciated and we should bring its real value back," the Mehr news agency quoted Ahmadinejad as saying.

The rial has dropped on international exchanges from 70 to the dollar at the time of the Islamic revolution in 1979 to around 10,000 rials today.

Central Bank chief Mahmoud Bahmani told reporters on Wednesday that he expected "one dollar to become even more expensive in the next year."

Bahmani had in September announced plans to strike three zeros off the currency but later said the idea had been shelved for further consideration.

Ahmadinejad did not say when the changes would take effect and gave no further details of the plan.

A populist, Ahmadinejad has been criticised for pumping excessive liquidity into the economy to fund infrastructure projects and causing huge money supply growth by giving loans, triggering high inflation.

The country's inflation rate stands at 13.5 percent and has been slowly falling since October 2008 when it hit a peak of around 30 percent.

Bahmani vowed that inflation would be sliced back even further within the current financial year, which ends next March.

But he also did not rule out that the opposite could happen and that the rate would go up again after the government implements a plan to scrap subsidies on main goods including fuel.

Some banking experts say they do not believe that by simply removing zeros from the depreciated currency it will recover value and have called instead for measures such as tightening up on money supply.

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