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Old September 10th, 2007, 09:34 PM   #1
Rahmani
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President Orders Currency Reform

Roumers have been going on that Iran would get a new currency with new notes, startling with the 50.000 rial as a pilot test. In time Iran would do what Turkey did and launch a new Iranian rial, losing the 3 digits. Chances are that there would be new bank notes, something like:

500 new rial (50.000 toman)
200 new rial (20.000 toman)
100 new rial (100.000 toman)
50 new rial (5.000 toman)
20 new rial (2.000 toman)
10 new rial (1.000 toman)
5 new rial (500 toman)

This will probally happen after 2010 or 2015.

Quote:
President has directed the Central Bank of Iran to consider a plan to knock off three zeros from the national currency the rial.
A supervising member of the dissolved Monetary and Credit Council, Gholamreza Mesbahi Moqaddam told Fars news agency that current the 50,000-rial note has replaced the 20,000-rial note as the highest denomination national banknote, reported the Persian daily ’Jam-e Jam’.
The purchasing power of the 10,000-rial note, which was first issued in 1972, is currently equivalent to 1,280,000 rials, proving that back in 1972 the 10,000-rial note was considered to be a large-denomination note and anyone with a salary of 10,000-20,000 rials would have received only one or two notes, he said.
Mesbahi Moqaddam said that today Iran’s large denomination bills are equivalent to a change in many foreign countries, adding that one British Pound Sterling is approximately equal to 20,000 rials and one dollar is around 10,000 rials.
He attributed the situation to the decline of Iran’s national currency over the recent decades, adding that the issue has caused numerous objective and subjective problems.
The official said that the total cost of printing banknotes is 600 billion rials. Per capita banknote in circulation is 114 in Iran, while the figure is 10-12 in Europe, he compared.
Mesbahi Moqaddam, who is also an MP from Tehran, explained that the large volume of banknotes in circulation is quickly worn-out making trade transactions lengthy. The huge number of banknotes has also resulted in banks using counting machines for banknotes, he added.
He referred to the issuance of traveler checks as yet another dilemma noting that checks worth between 500,000 and 5,000,000 rials are used by the people. This, he said, indicates the need for banknotes with large-denomination which will lead to inflation.


I think it would not be an easy task to do, but it was possible in Turkey. It could make the local money market much more flexible, but Iran would lose a lot of millionaires
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Old September 10th, 2007, 10:01 PM   #2
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As I have said in another thread... It would be a logistical nightmare as there are so many remote areas all over Iran... along with the general apathy of the Iranian population... But I do support this idea in theory.

Alas there really needs something to be done and relaunching the currency is a potential quick fix to the extremely low value of IR currency... knowing the IRI I bet this potential new currency will be super Islamic rather than Iranian.
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Old September 10th, 2007, 11:50 PM   #3
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It sounds good
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Old September 11th, 2007, 06:10 AM   #4
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What I think the government is trying to do with this is one step to eventually get rid of subsidie. Subsidies is good for NOW for lowering prices and we can see the results -- real income is 4 times greater than nominal income. But the problem is that it is such a great expence -- 25% of our GDP spent on subsidies (17% on oil subsidies). If we raise people's real income through raising the value of the currency, then we can maybe spend less on subsidies. And before this with oil rationing and now CNG cars being produced then we already have reason to lower oil subsidies. This is what I think is our intention, enshallah ke asar dashtebashe.
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Old September 11th, 2007, 08:03 AM   #5
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Another thing that government is doing is privatizing everything.

Some say it’s a move to prevent a war, as most buyers could be European companies. Other say they are selling Iran, yet others say it’s a exit strategy and they are just trying to fill their pockets fast before Iran collapses or is attacked.

Quote:
Iran Khodro, Saipa Set for Full Privatization
Deputy head of Privatization Organization said that as per privatization plan, all shares of two leading automakers Saipa and Iran Khodro would be transferred to the private sector by March 2008.
Mehdi Aqdaei explained that the move requires cabinet approval and a decision on this will be made soon, Persian daily ’Jam-e Jam’ reported.
Presently, the Industrial Development and Renovation Organization (IDRO) holds over 40 percent of the shares of the two companies.
Earlier, managing director of Iran Khodro, Manouchehr Manteqi said that two reliable European automaker companies had shown interest in purchasing the shares of Iran Khodro. However, IDRO denied this.
According to the latest information, representatives from one of the mentioned European automakers came to Iran and visited Iran Khodro plant last week. The names of the European automakers were not disclosed.
Also, Head of Majlis Industries and Mines Commission said, “We should welcome the purchase of the stocks of these two companies by foreign automakers given its huge advantages.“
Seyyed Hossein Hashemi noted that if a foreign company purchases 40-50 percent of the stocks of Iran Khodro or Saipa, it will benefit both automakers. Given the extensive propaganda against Iran, the deal with foreign automakers will be also good in terms of politics and will have positive political outcome, he added.
He pointed out that although a part of the shares of the two companies had been ceded to the private sector, they are still run by state managers.
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Old September 11th, 2007, 08:23 AM   #6
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I don't think privatisation will be as drastic as they are saying.
And even if it is, there will be strict business regulations. The privatisation will only be in name -- it is a way to get around sanctions because technically European countries can export products to an Iranian company if it is not state owned.
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Old September 11th, 2007, 11:23 AM   #7
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It is a good idea but i dought it wil happen.
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Old September 15th, 2007, 02:05 AM   #8
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New currency requires more planning
Wed, 12 Sep 2007 17:55:16

More planning is needed before changing the national currency
Economist believes changing the national currency could have both positive and negative impacts on the overall economic performance.
Zahra Karimi, member of the scientific board of Mazandaran University said, "Some countries experienced positive results by changing their currencies but for Iran this may result into both positive and negative outcomes."

"Removal of three zeros from the currency could facilitate the recycling of the old bills by helping the central bank to print fewer bills with higher purchasing power," she said.

However, she added, "The changing of the currency alone would not contain the inflationary cycles and to do so it requires further planning."

Some countries including Turkey and Brazil facing runaway inflations, introduced new currencies into their economies, which resulted into positive outcome in their overall economic performance.

In Iran's case, economists seem to be more cautious when it comes to the changing of the currency, or more precisely, removing three zeros from it.


http://www.presstv.ir/Detail.aspx?id...onid=351020102
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Old December 19th, 2007, 01:51 PM   #9
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Iran denies banknote change rumors
Tue, 18 Dec 2007 17:17:50

Iran has denied the recent reports that it has decided to knock three zeros off its national currency to reduce the number of banknotes.

"The Ministry of Economy has not made a decision on whether to remove three zeros off banknotes," a statement by the ministry said, ISNA reported.

"The recent report circulated by the media is only a proposal made by some MPs, which the ministry is considering," the statement added.

The Ministry of Economy said it was 'highly unlikely' that the plan would be approved by the parliament.

Gholam-Reza Mesbahi-Moqaddam, an Iranian MP, said on Monday that the Ministry of Economy had agreed with the proposal of lopping three zeros off the country's banknotes.

The chronic inflation has eroded the value of the national currency, whose highest-denominated banknote is 50,000 rials (about $5.3).

http://www.presstv.ir/detail.aspx?id...onid=351020102

I believe this article is aimed at rebutting this one: Iran may drop three zeros from rial
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Old December 20th, 2007, 12:55 PM   #10
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Yes they always deny all the good moves.
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Old January 14th, 2008, 12:27 PM   #11
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Quote:
Need for high-denomination banknotes

Deputy head of Central Bank of Iran for legal and parliamentary affairs attributed the issuance of travelers’ checks to the absence of high-denomination banknotes.

Heidar Mostakhdemin-Hosseini called for issuing more 50,000-rial banknotes. Speaking to MNA, he said that the country is lagging in terms of issuing higher denomination banknotes. Stressing that high-denomination banknotes should have been circulated sooner, he said that the initiative would help reduce the number of travelers’ checks. Rejecting that high-denomination banknotes would lead to a rise in inflation and liquidity, he added that low-denomination banknotes and coins are not used much--even in the simplest transactions.

Mostakhdemin-Hosseini pointed out that at present banks could not meet the client’s demands for 50,000-rial banknotes. Therefore more high-denomination banknotes should be printed as a first step and the issuance of 100,000-rial banknotes should be pursued in the second step. According to him, if travelers’ checks are issued as per regulations and CBI supervision, it would not have an impact on liquidity.
It seems that Iran might be getting 100.000 rial banknotes. The next step is 200.000 rial, 500.000 and removing the last 3 zeros.
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Old August 1st, 2008, 05:47 PM   #12
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Iran move to lop zeros off rial
Mon, 28 Jul 2008 19:57:22

Iran is mulling over a plan to knock three zeros off the national currency rial as inflation soars above 26 percent in the country.

Numerous proposals, such as 'lopping three or four zeros off the national currency' have been made to the government in a bid to overhaul the economy, said the Governor of the Central Bank (CBI) of Iran Tahmasb Mazaheri.

"Such decision needs precise technical studies," the CBI chief added on Sunday after a cabinet session.

In September 2007, a member of the Iranian Parliament Gholam-Reza Mesbahi-Moqaddam said the president had ordered the Central Bank of Iran to study a plan to drop three zeros off the national currency.

The double-digit inflation plaguing the country for years has eroded the value of the national currency whose highest-denominated banknote is 50,000 rials (about $5.3).

"The issue of rial revaluation against other major currencies is also under assessment as well," Mazaheri added.

The remarks by Mazaheri came a day after acting Economy Minister, Hossein Samsami, was quoted by the Donya-e Eqtesad business daily that Tehran is considering reducing the value of the US currency against Iranian rial in an effort to curb inflation.

Several media reported in recent days that the country was evaluating an idea to raise the rial's value to 4,500 against the dollar from the current central bank rate of over 9,300 rials.

"This rate (4,500 rials) comes from a study conducted years ago," said Mazaheri. "Under the current circumstance, a rial revaluation against the dollar requires extensive studies."

http://www.presstv.ir/Detail.aspx?id...onid=351020102
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Old August 10th, 2008, 03:51 PM   #13
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Iran plans to change national currency system in near future

Iran plans to change national currency system in near future
M&C | August 10, 2008

Iran plans to change its national currency system in the near future, Iran's Central Bank chief said Sunday. 'Due to inflation, we either have to make new bank notes and coins or introduce a new currency instead of the Rial,' Tahmasseb Mazaheri was quoted by official news agency IRNA as saying. Due to an inflation rate of almost 30 per cent - in some cases even up to 50 per cent - the current bank notes can no longer correspond to the prices and people have to take a lot of cash with them for shopping.

The notes start with 500 Rials (about 5 cents) and end with 50,000 Rials (5.30 dollars). The coins are de facto worthless. 'We still work on the process but hope to finalize a new currency system within the next three months,' the Central Bank chief said. He also called for an expansion of the credit card system in Iran which he said could solve the people's problem of having to carry too much cash.

Although there is currently a local credit card system in Iran, many shops do not accept them. Also cash dispensers do not always work properly.
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Old August 22nd, 2008, 05:23 AM   #14
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Iran central bank issues own high denomination notes

Thu Aug 21, 9:28 AM ET

TEHRAN (AFP) - Iran's central bank has begun issuing its own high-denomination paper notes to replace the promissory notes issued by private banks which will now be banned, state media said on Thursday.

Central bank governor Tahmasb Mazaheri said the move was intended to reassert control over the money supply as the bank considers broader currency reform amid double-digit inflation.

A 500,000-rial (35-euro) note was issued on Saturday and a one-million rial note is to follow this weekend, Mazaheri told the official IRNA news agency on Wednesday.

State television carried a central bank statement on Thursday reassuring the public that the new paper notes should be regarded as legal tender just like ordinary banknotes.

Iran's highest denomination banknote is a 50,000-rial note which was introduced in March 2007.

"Old notes which were being printed uncontrolled by different banks had lowered the possibility of controlling money supply," Mazaheri told IRNA.

He said the bank was also considering knocking three or four zeroes off the rial in a wider currency reform.

"We hope that with modification of the monetary system, we can print higher denomination notes," he said.

On the face of the new 500,000-rial note is a bold "50," which could prepare the way for such reform.

Iran has seen a sharp increase in money supply growth in recent years. It topped 26 percent in June compared to the same month in 2007.

http://news.yahoo.com/s/afp/20080821...y_080821132805
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Old August 27th, 2008, 05:38 PM   #15
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Pics of the new cheques:









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Old August 28th, 2008, 12:25 AM   #16
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^ i'm quite suprised IRI put an image of takt e jamshid on its notes!

... and not the usual masjed.


welcome change nevertheless.
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Old August 28th, 2008, 10:09 PM   #17
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They still have those usual masjed on the money but it looks fresh now!

Love the change
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Old September 4th, 2008, 04:19 PM   #18
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Reports: Toman Iran's new currency

Reports: Toman Iran's new currency
PRESS TV | September 04, 2008

An official at the Central Bank of Iran says the CBI plans to slash four zeros off the country's national currency and rename it to toman. "The Central Bank is planning to replace the rial with toman by removing three zeros from the end. However, we are still open to any expert suggestions on this matter," the official, who refused to be named, told Farsnews on Tuesday.

The rial has been used as Iran's official national currency since 1932. However, in more recent years the term 'toman' has replaced the rial in daily practice as an unofficial unit. A toman, in its current form, is worth 10 rials, but now the CBI plans to slash three zeros off the unit - or in other words four zeros off the rial - and turn it into the country's official currency.

"The CBI will announce its final decision after studying all proposals for the name of the new currency," the source added. Iran's money shortage problem has led the CBI to include a change of currency in its so-called major 'monetary reform' package which encompasses various sectors of the Iranian economy.

The current bank notes do not correspond to the living costs, as a result customers and consumers have to carry a lot of cash everyday. As a temporary remedy for the problem, the CBI has recently printed two new Travelers Cheques (worth 500,000 and 1,000,000 rials equivalent to around USD 52 and USD 104 respectively). These new Travelers Cheques, which function quite similar to a banknote, are seen as the first step toward a new currency, as they have the figure 50 and 100 written on their top right hand corner.
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Old September 4th, 2008, 06:54 PM   #19
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good news
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Old September 8th, 2008, 05:24 AM   #20
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Quote:
Originally Posted by persian View Post
good news
Its good news! They will move to either a managed float against the euro or against a basket of currencies inlcuding oil! The later being preferred! The will not LOP. LOP will increase inlfation and do nothing for purchasing power! No way! I expect to see one rial equivalent of 2-3 USD maybe higher!
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