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Iran likely to introduce new currency

Press TV - Iran may knock three zeroes off the Rial and change the nation's currency system in a bid to staunch the eroding value of its money.

In an exclusive Tuesday interview with Mehr News Agency, Central Bank of Iran (CBI) Governor Tahmasb Mazaheri said that Iran was reviewing whether to "lop 3 or 4 zeros off the Iranian Rial to introduce a new currency."

Mazaheri said the move would be one of three proposed monetary solutions at the CBI to stop the further depreciation of the national currency including 'changing the nation's currency system'.

Dropping zeroes off the national currency has been an issue of debate over the past years among monetary policymakers in Iran where inflation currently stands at 26.1 percent, the highest level in recent years.

The double-digit inflation plaguing the country for years has eroded the value of the Rial. The most valuable banknote in the country is the 50,000 Rial bill, worth around $5.3.

The situation makes it difficult for people to shop, as they have no choice but to take stacks of money with them.

In February, the CBI chief said Iran was to introduce a higher denomination banknote, a 100,000 Rial paper bill.

Mazaheri said that among the three monetary reform policies under review is the decision to keep the current national currency, he added that this option, however, 'would not help resolve the banknote shortage problem facing the public'.

"Printing new travel checks to replace paper bills will temporarily resolve banknote shortage in the country," he said.

Analysts say Iran is trying to follow the lead of its neighbor Turkey which recovered from a major economic crisis in recent years after it lopped six zeros off its national currency to create the New Turkish Lira and facilitate cash transactions in 2005.

... Payvand News - 08/13/08 ... --

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