Tehran10 hours ago
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Iran is going to remove 4 zero from its currency riyal. If you understand in an easy way, soon the price of 10,000 riyals will be only 1 riyal. It has received the approval of the Iranian Parliament. This step has been taken due to rising inflation.
Currently, a $ 1 dollar value in the international market has reached 11.50 lakh riyal. This proposal was being prepared for many years.
Shamsaldin Hussain, head of the Economic Committee of Irani Parliament, told the government TV that the change would be applicable after 2 years. Even after the change, the old riyal currency can be used for three years.
Poverty rate in Iran remains more than 35%.
Iran takes steps to avoid inflation
This step is mainly taken to deal with the devaluation of the currency and high inflation.
- High inflation (inflation): In Iran, inflation has remained above 30-40% for the past several years. It was 38.7% in May 2025.
- Use of big nabur in shopping: The price of Rial has fallen so much that about 1,150,000 riyal for US $ 1,150,000. This uses big numbers (such as millions of crores) in bill, bank statement and daily purchases, which is complicated.
- Reducing the cost of note printing: It costs more in printing and handling large notes. Short numbers will make printing and logistics cheaper.
- Strengthen currency: This step is an attempt to increase the price of currency. With this, the situation of Rial will improve compared to the currency of other countries. However, this may directly affect the trade.
Change in rial
- To make transactions easier: Riyal’s units will become smaller due to the removal of four zero. For example, if you need 10,00,000 riyals to buy something right now, the same thing will be found in 100 riyal after improvement.
- No direct effect on inflation: This improvement only changes the units of the currency, not its real value. If inflation is not controlled, the value of riyal will continue to decrease.
- Facility in banking and digital payment: Complications in computer and mobile apps will reduce complications due to large numbers.
- Psychological effects: Small numbers will facilitate people to understand the value of the currency, which can make their purchase and financial plan easily. However, this is only psychological effects.
The inflation rate in Iran remains above 30-40%. It was 38.7% in May 2025.
Iran’s trade and relationship with the world stressed
Iran’s economy has faced many challenges since the 1979 Islamic revolution. Inflation is continuously increasing, the main reason for this has been the high import of imports and reduced exports.
Due to this, the price of Rial continued to fall. The situation in 2023 became so bad that inflation (inflation) also left behind the devaluation of riyal (intentional reduction in value). Division makes the country’s currency cheaper, making its products cheap for foreign buyers and increases the demand for export.
International restrictions deepened the lack of foreign currency. Iran’s trade and relationship with the world remained stressful. Political isolation further weakened the economy, furthering the value of Rial.
America has imposed a ban
The US has imposed several restrictions on Iran due to nuclear programs and security reasons. The Trump administration adopted a ‘maximum pressure’ policy against Iran, which imposed strict restrictions on oil exports, banking, and shipping. Also punished companies buying Iranian oil.
By October 2025, the UN Sanctuary further enhanced Iran’s weapon programs. These restrictions made foreign banking transactions difficult, dollars and euros like foreign currency came down, imports became expensive and limited. Investments and business were also affected.
Oil exports decreased due to restrictions, inflation increased
- Reduction in oil exports: Iran’s oil exports reached 1.4–1.7 million barrels/day to 1 million barrels/days in 2025. This led to a decrease in revenue by $ 5-10 billion.
- Lack of foreign exchange: Boycott and restrictions on banks from Swift limited foreign exchange reserves, which was $ 26 billion in 2024 and $ 34 billion in 2025, but is an obstacle to use.
- Dearness: The value of Rial in 2023-2025 fell 14% and fell, inflation reached 90%. The decision to remove four zero is the result of this.
- Imported: Drugs, medical equipment, and machinery reduction in imports affected humanitarian crisis and industrial production.
- Business routes limited: Iran now trades mainly with China (90% oil exports), Türkiye, UAE, and Iraq. Trade from Europe and America is almost zero.
Iran’s economy dependent on oil exports
In 2024, Iran’s total exports were around $ 22.18 billion, with a large part of oil and patrochemicals, while imports stood at $ 34.65 billion, reaching the trade deficit to $ 12.47 billion.
In 2025, due to a decrease in oil exports and restrictions, the deficit increased to $ 15 billion further. The main trading partners include China (35% export), Türkiye, UAE and Iraq. Iran exports 90% oil to China.
Iran has tried to increase trade with neighboring countries and Eurasian Economic Union, such as the Instc Corridor and new transit routes with China. Nevertheless, GDP growth in 2025 is estimated to be only 0.3%. It will be difficult to stabilize the value of trade and riyal without the restriction lifting or restoration of the nuclear deal.
Iran has the fourth largest oil reserves in the world. The country’s economy depends a lot on oil.
3 countries including Turkas have done this
- Venezuela- Venezuela several times removed zero from her currency bolivar due to continuous high inflation and political-economic crisis. Despite this, inflation is still very high.
- Turks- In 2005, Turkey removed 6 zeros from the old currency Turkish Lira and introduced the new Lira. Its purpose was to make transactions easier and improve the image of the currency.
- Brazil- After excessive inflation in the 1990s, Brazil removed the zero from the currency crews in the new crews.
- Zimbabwe- In the 2000s, Zimbabwe several times due to extreme inflation, many times removed zero in the currency zimbabwe dollars. They had to use foreign currency.
