Iran parliament advances plan to slash four zeros from rial
Iran's parliament has approved a bill in committee that paves the way to remove four zeros from the national currency, the rial, in an effort to tackle long-term inflation.
Iran's parliament has approved a bill in committee that paves the way to remove four zeros from the national currency, the rial, in an effort to tackle long-term inflation.
Under the proposed plan, the new unit also called the rial would be equivalent to 10,000 of the current rials.
The head of the parliament's economic committee announced on Sunday that each new rial would be divided into 100 qirans.
Iran's banking system continues to face major challenges due to international sanctions and its disconnection from global financial networks. Corruption and economic mismanagement have also contributed to widespread economic hardship and market instability.
The rial has lost over 90% of its value since US sanctions were reimposed in 2018.
Inflation in Iran has remained high for years. The latest data shows that the annual point-to-point inflation rate reached 38.7% in May 2025.
Experts say that while cutting zeros from the currency may have some benefits, it does not offer a clear solution to Iran’s deeper economic problems.
“This policy is a superficial move. It removes several zeros, which creates a psychological effect, making people feel the value of money has changed. It also simplifies accounting,” economist Ahmad Alavi told Iran International on Monday.
“The abundance of zeros in the currency is a symptom of structural inflation rooted in deep-seated economic issues, policy failures, systemic constraints, and a corrupt, rentier economy,” Alavi added.
Official inflation rates in Iran have not dipped below 30% in recent years. According to data from Trading Economics in one year May 2024 to 2025, the lowest recorded was 31% in May 2024, while the highest was 38.9% in April 2025.
“The core issue lies in the structure. Either Iran’s economy and governance must undergo fundamental reform to create conditions for monetary stability and lower inflation, or, if the current structure persists, the problems will remain—and the rial’s value will continue to erode against other currencies,” Alavi added.
The bill still needs to go through final approval in the parliament and then head to Guardian Council to be signed into law.
