Dozens of countries all over the world have used the same trick called redenomination to hide how they have stolen their own citizens’ money through inflation or hyperinflation. The next nation to try this economic sleight of hand is the government of the Islamic Republic of Iran.
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Iran Cuts Four Zeros From Hyperinflated Rial
According to recent media reports from Iran, the government in Tehran last week approved a major change to the country’s fiat currency presented by the Central Bank of Iran (CBI) back in January. Four zeros will be cut from the Iranian rial and it will also be completely replaced, gradually and over a two-year period, by a new currency going by an ancient name, the toman.
“The council of ministers, at a meeting presided by President Hassan Rouhani this morning, approved the central bank’s proposed bill to change the national currency from the rial to the toman and delete four zeros,” the Fars news agency reported on Wednesday. This decision was made “to maintain the efficiency of the national currency and facilitate and restore the role of cash instruments in domestic monetary transactions,” Fars added.
The Persian toman was used in the country until 1932 when it was replaced by the rial as the official currency. Out of habit, the people of Iran still use it as a monetary unit to this day to mean 10 rials, exactly at the rate it was replaced at almost 90 years ago. However, the new toman will be worth 100 rials, creating in effect another tenfold redenomination of the Iranian currency.
The real reason for the Iranian government’s move is that
