Iran will remove four zeros from its rial banknotes next year, officially adopting the toman as its currency unit, the country’s central bank chief announced Monday.
The long-delayed currency overhaul comes as the rial struggles against historic devaluation, with exchange rates exceeding 1 million rials per US dollar in March. Recent market rates have shown extreme volatility. Currency traders in Tehran reported exchange rates of 853,500 rials per dollar in early May.
“This year, we will definitely pursue the removal of zeros,” said Mohammad Reza Farzin, Central Bank Governor, during an economic policy meeting in Tehran.
Iranian citizens have informally used the toman for years, routinely dropping a zero when discussing prices. Under the reform, 10,000 rials will officially equal one toman.
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Economic analysts question whether the reform addresses Iran’s fundamental economic challenges. “The problem is not the four zeros, but the persistent inflation and monetary mismanagement,” economist Jamshid Asadi said in an earlier analysis.
Parliament initially approved the currency transition in 2020, estimating implementation costs around $150 million. Officials expect a two-year period when both denominations will circulate simultaneously.
Farzin described 2025 as “a year of transformation” with broader banking reforms underway.
Iran’s economy continues to struggle under international sanctions. Government statistics indicate approximately one-third of Iranians live below the poverty line, with widespread unemployment affecting the population.
The value of Iranian currency has deteriorated dramatically over time. Banknotes worth significant sums before the 1979 revolution now hold fractional value.
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