The Central Bank of Iran (CBI) has outlined detailed plans for removing four zeros from the national currency, with the Director General of Economic Policies stating that renaming the rial will be in accordance with a bill currently under review by parliament, IRNA reported on May 13.

Jafar Mehdizadeh explained on May 13 that the national currency reform has a 12-year history dating back to the late 2000s, with extensive research conducted by the Central Bank's Monetary and Banking Research Institute.

"While conceptually and theoretically the issue may not seem overly complex, in reality, removing four zeros and reforming the national currency involves significant logistical challenges," Mehdizadeh said, noting it requires nationwide coordination across all sectors.

The complexity extends to auditing changes, accounting adjustments, legal reforms, debt settlements, software modifications, pricing systems, the stock exchange, capital markets, and manufacturing sectors.

According to Mehdizadeh, the reform could be implemented either through a transitional phase with a new code or as a sudden switch, though the latter would place greater pressure on Central Bank resources.

He revealed that although this is a longstanding project, the Central Bank has already removed four zeros from newly printed banknotes, but this measure only applies to physical cash. Public awareness campaigns will be essential to explain the reform comprehensively.

"We cannot have two types of rials," Mehdizadeh emphasised, explaining that without changing the currency name during the transition, the country would operate with two types of rials, necessitating double printing of banknotes. He cited Turkey's experience where the new lira circulated alongside the old one before eventually replacing it.

The official noted that each zero added to a product's price implies a tenfold increase. With an average long-term inflation rate of 25%, it would take 40 years for a single zero to be added to a commodity's price. Even under current inflationary conditions, he maintained the plan remains justifiable.

Despite declining use of banknotes in the payment system, Mehdizadeh acknowledged public demand for cash persists, placing a heavy burden on the Central Bank. He highlighted that domestic production of banknote materials like ink and watermarks has helped overcome sanctions-related challenges.

Earlier, at the opening of the Monetary and Banking System Conference, Central Bank Governor Mohammad Reza Farzin confirmed the bank will pursue the four-zero removal plan this year.

In 2019, the previous Rouhani administration attempted to remove the zeros but faced large objections from MPs and other authorities in the country at the time.