Mr. Seif said the current budget had not allocated any sum for zero-dropping scheme which had haunted many in the community of economic analysts as the panacea for economic woes and depreciation; “Central Bank has sent a proposal to the government where the Bank designated the future currency as Toman; Parliament should receive the bill and debate it; there is no near horizon for dropping zeros from our banknotes,” he told Mehr News on Sunday.
“Sanctions, recession, and other myriad of factors severely brought about the depreciation of Rial, thus adding zeros to banknotes; stability and a single-digit inflation rate will set in motion the process of redenomination, also better known as ‘zero-dropping’ from banknotes,” said the governor.
Seif however did not provide clear information as to what other foreign currency would replace US dollar in Iran’s trade with the world; “we should examine dominant currencies with strength in global markets and a central role in Iran’s trade other than dollar,” he added, leaving open the question whether Euro or British Sterling would replace dollar.
Chinese Yuan Renminbi and Russian Ruble had been currencies Iranian officials designated as replacement for US dollar; but these have all been short-term and for trade with only those two countries to counterbalance the adverse effects of sanctions which deprived the country’s financial system from rights to trade in dollars. Neither currencies have ever lived to the status the officials had orchestrated for them.
Central Bank governor lamented what had been the major trouble for country’s banking system, the lack of transparency and opaque environment which masked corruption and money-laundering, inter alia other illicit activities; “banks fail to provide the Central Bank a robust and healthy financial expression; the standards of financial operations fall short of global threshold of good conduct; this is a major barrier our banks have no effective means to fight along with possible abuses which would re-channel resources to terrorist activities overseas,” he objected.
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