The President of Iran’s Chamber of Commerce Mohammad Nahavandian today warned the government that eliminating three zeros from the national currency would not resolve the inflation problem. On Saturday, the minister of economy had announced that Iran would soon redenominate its currency by eliminating three zeros from its unit. At present, each dollar equals more than 10,000 rials. After redenomination, each dollar would become 10 rials (or one touman as the local currency is popularly referred to.)
“Tackling economic problems requires an ability to distinguish between the superficial and the real. The number of zeros is not our real problem. If by removing the zeros we could fight the inflation, then the solution was easy. We need to fight the root causes of inflation, not the zeros,” Nahavandian said.
“The economic reconstruction requires the expansion of real market competition, elimination of all subsidies, and a move from (the current) hand-out economy to a production economy which creates real jobs,” Nahavanian added [Donya-e Eqtesad, 5 April].