Iran approves plan to cut four zeros from falling currency

Each toman, which has been cleared by Parliament, will be worth 10,000 rials under the new system

Currency makeover: A dealer selling different denominations of Iran’s rials in Tehran earlier this year.

Iran's parliament has passed a bill allowing the government to slash four zeros from the rial, Iranian state media reported on Monday, after a sharp fall in the value of the currency as a result of crippling U.S. sanctions.

Iran's national currency will be changed from the rial to the Toman, which is equal to 10,000 rials, under the bill.

“The bill to remove four zeros from the national currency was approved by lawmakers,” Iran's Students News Agency ISNA reported. The bill needs to be approved by the clerical body that vets legislation before it takes effect.

Iran's state TV said the Central Bank of Iran will have two years to “pave the ground to change the currency to Toman”.

The idea of removing four zeros has been floated since 2008, but gained strength after 2018, when U.S. President Donald Trump exited Iran's 2015 nuclear deal and reimposed sanctions, as the rial lost more than 60% of its value.

The Iranian currency was trading at about 156,000 rials per dollar on the unofficial market on Monday, according to foreign exchange websites.

Iran's weak currency and high inflation have led to sporadic street protests since late 2017.