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CBI to Present Rial Redenomination Bill

Service : Economy
TEHRAN, July 19 (ICANA) – Governor of the Central Bank of Iran (CBI) Mahmoud Bahmani says the bill to drop four zeros from the Iranian currency, the Rial, will be submitted to Parliament (Majlis) within the next three months.
Tuesday, July 19, 2011 12:35:54 PM
CBI to Present Rial Redenomination Bill

“We will have meetings with Majlis [lawmakers] and we will offer necessary explanations in this regard,” Bahmani said in an interview with IRNA on Monday.

“If we can garner the complete support of Majlis this -- in other words dropping four zeros [from the Rial] -- will happen smoothly,” he added.

The CBI Governor believes that currency redenomination is a good idea, and says this is the result of a 24-month study and would strengthen the national currency.

Meanwhile, some economists are concerned about the adverse effects of such a move on the rate of inflation in the country.

“First of all, we have to control the inflation. This is the first prerequisite in fact to have a successful implementation. Right now, we are facing hyper inflation as well as what is called “spiral inflation,” Hossein Raghfar, an economics professor at Tehran's al-Zahra University, told Press TV last Wednesday.

Some experts say under the current circumstances it is difficult to predict future economic developments.

Mohammad Khoshchehreh, a former lawmaker, was one of the legislators who originally proposed dropping two zeros off the national currency five years ago.

“When we proposed this, the volume of currency in circulation was high and our oil revenues were on the rise… Now things are different and I believe that we need to focus on policies that will boost our economic growth and remove obstacles that usually impede production while controlling the import of goods before slashing the zeros,” he said.

Khoshchehreh added, “It is essential that we study the effects in other countries such as Turkey which have had to take similar measures.”

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