Business News

Tehran approves plans to cut four zeros from local currency

Jul 11, 2011, 13:10 GMT

Tehran - The Iranian government has agreed with plans by the Central Bank (CBI) to cut four zeros from the local currency, CBI President Mahmoud Bahmani said Monday.

Bahmani told the news network Khabar that further details would soon be announced on the CBI website.

The plan to devaluate the Iranian Rial, which stands more than 10,000 to the US dollar and over 15,000 to euro, has been on the agenda since last year but not yet approved by the government.

Bahmani said that CBI and government also plan to rename the local currency but gave no further details.

In May, the CBI put the official inflation rate at 14.2 per cent but economic observers doubt that this rate reflected the real inflation.

Especially after last December's removal of subsidies on food and fuel by the government, petrol prices have surged seven-fold.

Tehran insists that international sanctions imposed on Iran for its uncompromising stance over its nuclear programme have not affected the local economy.

Observers however believe that the effects of the sanctions on both the national economy and on people's lives could not be played down.