Current Affairs Iran to launch a new currency – Toman

Iran to launch a new currency – Toman

561

The Government of Iran will change its existing currency from ‘Rial’ to a new currency named ‘Toman’.
The government has passed Iran’s Monetary and Banking bill that will cut four zeros from Iran’s currency.
One toman will be equal to 10,000 rials.
The Central Bank of the Islamic Republic of Iran is responsible for developing and maintaining the Iranian rial.

REASON FOR CHANGE

The government had to introduce new currency as the existing currency ‘Rial’ was crippling badly because of the sanctions imposed by the US.
This will make it easier for people to transact without wasting time calculating the price of eggs or chicken, which can run into tens of thousands of rials. E.g. Instead of paying 250,000 rials for a packet of eggs, you’ll pay just 25 tomans.
Due to high inflation, the value of rial has eroded over the years. It costs more than 150,000 rials to buy one US dollar in the open market while the official exchange rate is pegged at 42,000 rials to one US dollar.

IMPORTANT FACTS

The Central Bank of Iran will have two years to change Iran’s currency to Toman.
The old coins and bills will be gradually collected to replace them with new ones.
The existing currency of Iran ‘Rial’ will continue to remain legal tender alongside “Toman” for two years.

BACKGROUND

The Iranian government had been considering replacing currency notes, something known as a redenomination, since long.
However, this idea got a push after US President Donald Trump announced the US exit from the 2015 nuclear deal in 2018.
The US accused Iran of continuing its nuclear activities and not following the terms of the deal.
It also imposed heavy sanctions on Iran.
Ria, Iran’s currency lost more than 60 percent of its value following the sanctions.

ABOUT IRAN NUCLEAR DEAL(Joint Comprehensive Plan of Action)

An agreement on the Iranian nuclear program reached in Viennaon July 14, 2015.
It was signed between Iran and the P5+1 (the five permanent members of the United Nations Security Council—China, France, Russia, United Kingdom, United States—plus Germany) together with the European Union.
Iran agreed to eliminate its stockpile of medium-enriched uranium, cut its stockpile of low-enriched uranium by 98%, and reduce by about two-thirds the number of its gas centrifugesfor 13 years. For the next 15 years Iran will only enrich uranium up to 3.67%.

STATIC INFO