Iran proposes slashing zeros from currency after decades of decline

{"text":[[{"start":12.25,"text":"Iran has proposed cutting four zeros from the rial after decades of inflation and economic pain eroded the value of the currency."}],[{"start":23.09,"text":"The parliament’s economic committee approved the general outlines of a government bill to re-denominate the rial on Sunday. Shamseddin Hosseini, the head of the committee, said the new currency would still be known as the rial, with one unit equivalent to 10,000 rials in current terms."}],[{"start":43.489999999999995,"text":"The proposed reduction in digits is designed to simplify financial calculations and accounting, and lower the costs of printing banknotes. Hosseini said the new rial would itself be made up of 100 gherans."}],[{"start":60.839999999999996,"text":"Iran’s currency has undergone significant devaluation due to international sanctions, which have isolated the country from the global banking system and throttled its economy."}],[{"start":74.27,"text":"The rial weakened further against the dollar in recent days amid continued political uncertainty following the 12-day war between Israel and Iran in June."}],[{"start":null,"text":""}],[{"start":86.97,"text":"Iran has been contemplating currency reform since the 1990s. The bill will have to be officially submitted to parliament for approval, and will ultimately need the endorsement of the Guardian Council, the constitutional body that vets new legislation, to become law."}],[{"start":107.4,"text":"Jafar Ghaderi, vice chair of the committee, said last week that the removal of zeros would not have any impact on inflation but could lower transaction costs."}],[{"start":121.64,"text":"Analysts believe that unless accompanied by inflation control and financial reforms, the cosmetic move will fail to alleviate any of the country’s economic problems."}],[{"start":135.07,"text":"Kamran Nadri, an economist, wrote in the local press last week that the removal of zeros “is neither an effective monetary policy nor a mechanism to control inflation. It is simply a formal adjustment to the currency unit for accounting purposes.”"}],[{"start":154.29999999999998,"text":"Iran is not alone in considering currency reforms. Over the past 25 years, countries including Turkey, Romania and Zambia have lopped zeros from their currencies after bouts of runaway inflation left citizens carrying unwieldy amounts of banknotes for daily transactions."}],[{"start":177.89,"text":"Israel’s current new shekel was introduced in 1985-86 with the removal of three zeros from the hyperinflated old shekel, which had itself only recently replaced the plummeting Israeli pound."}],[{"start":196.07,"text":"In addition to inflation, other challenges facing Iran’s economy include over reliance on oil revenues and subsidies, chronic mismanagement and cronyism involving politically connected elites. Sanctions on banking and oil exports limit revenues and reduce foreign investment."}],[{"start":215.29999999999998,"text":"Economists say there is little Iran can do to turn the economy around without sanctions relief."}],[{"start":222.73999999999998,"text":"Before Israel’s attack in June triggered the war, Tehran had been in talks with the US — which also bombed Iran during the conflict — over a deal to ease sanctions in exchange for curbs on its nuclear programme."}],[{"start":240.73999999999998,"text":"Foreign minister Abbas Araghchi told the Financial Times last week that Tehran was open to resuming negotiations if the US agreed to compensation for losses incurred during the war, and gave assurances Iran would not be attacked during negotiations again."}],[{"start":260.38,"text":"Separately, Iran’s Supreme National Security Council on Sunday endorsed the formation of a new defence council to “oversee defence plans and the enhancement of armed forces’ capabilities in a centralised manner”."}],[{"start":285.51,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1754358847_1320.mp3"}