Iran Removes Four Zeros from Currency, 10,000 Rials Now Equal 1 Rial
Inflation in Iran has reached unprecedented levels, forcing citizens to carry bundles of cash for everyday purchases. To simplify transactions and restore the value of its currency, the Iranian government has passed a law to remove four zeros from the Rial.
This means that a 10,000 Rial note will now be worth just 1 Rial, and all prices will be adjusted accordingly. Currently, 1 US dollar equals approximately 1,150,000 Rials, but after the reform, it will become roughly 115 Rials.
Why Iran Made This Move
Daily transactions had become cumbersome due to the high number of zeros in the currency.
Inflation had severely devalued the Rial, with even small items requiring notes in the tens of thousands or more.
Accounting and pricing became difficult for businesses and consumers.
Removing zeros simplifies money calculations while restoring the currency’s “respect” in daily use.
Old Notes Will Remain Valid
The government has announced a three-year transition period, during which both old and new notes will circulate. Banks will gradually withdraw old notes and introduce new ones, ensuring no inconvenience to the public.
Will Goods Become Cheaper?
The removal of zeros will not reduce inflation or make goods cheaper. For example, if a salary is 2 million Rials and sugar costs 20,000 Rials, you could buy 100 kg of sugar before. After removing four zeros, your salary becomes 200 Rials and sugar costs 20 Rials—you can still buy 100 kg, so purchasing power remains unchanged.
Other Countries Have Done This
Iran is not the first country to take such a step. Venezuela removed six zeros from its currency in October 2021 to simplify accounting and transactions during hyperinflation.
This reform is primarily aimed at simplifying calculations, reducing transaction difficulties, and restoring the credibility of the Rial in daily economic activities.
