Iran’s Rhouhani government approved on Wednesday a call by the country’s central bank to replace the country’s rial currency with the more colloquially and historically known toman denomination.
If the country’s parliament votes to approve the measure, Iran’s currency will change name and value after nearly eight decades.
Historically, Iran’s currency was called the toman but it was changed in the early 1930s as the Pahlavi Dynasty sought to westernize the country’s institutions.
Toman is a Turkish word that means “Ten thousand.” Rial is Spanish for “royal.”
Under the proposed plan, 10 rials would equal one toman, reversing the initial conversion established in 1932.
Since the Revolution, Iranians have lost much of their purchasing power and American sanctions have further weakened the country’s rial currency. A US dollar is currently worth an estimated 32,000 rials at official exchange rates.
One euro is equal to nearly 34,000 rials.
“Switching the national currency from the rial to the toman is a measure which is meant to facilitate transactions by the public, to acknowledge what the people generally accept in their current trend of trade and to match the economics of the society with the realities,” said Valiollah Seif , the governor of the Central Bank of Iran, who proposed the currency swap.
In their daily interactions, many Iranians colloquially refer to rials as tomans, keeping with their historical currency and denomination when making transactions.
It is common in Iran today for a shop keeper to ask for 10 tomans for a good that costs 100 rials.
Amir Nojoomi the secretary of Iran’s High Council of Exchange Shops said swapping the currency and essentially dividing the country’s denomination by 10, will increase the value of Iran’s money against the US dollar 10-fold.
“President Rouhani’s move is like what Turkey’s [then Prime Minister] Recept Tayyip Erdogan did,” Nojoomi said. “When he took office, [Erdogan] ordered to strike six zeros from Turkey’s national currency.”
In 2003 it was agreed in Turkey that one million lira be restructured to one lira. In Turkey, the move was made to put a break on rampant hyper-inflation.
Iran’s government has been keen to curb the country’s historically high inflation, which in June 2016, fell under double digits inflation for the first time in 25 years.
It is unclear exactly when new coins and bank notes will be issued.