The Iranian government abolish several zeros from the currency in order to conform to their "real value", today unveiled the country's president, the ultraconservative Mahmoud Ahmadinejad.
"We plan to remove several zeros the rial to restore its real value ... certain reasons have made the rial has depreciated against gold, so we must adjust its value," without explaining the reasons revealed. Several economists have warned that the removal of the zeros of the Iranian currency (currently, one dollar equals about 10,000 rials), could spur inflation affecting the country for years. Ahmadinejad's economic policy has been widely criticized throughout his first term by the continuing rise in prices and inflation, which officially came to touch 30 per cent.
However, the latest official figures published by the Government to fall below 10 percent, although independent economists say the real figures are higher. The Iranian president began his new term with other controversial business decision, this time replacing the subsidies on food, energy and fuel and other products for direct aid to people in cash.
"One hundred percent of Iranians support will benefit from the law of reorientation of subsidies," said President. "The 70 percent of Iranians will aid in the first phase and the remaining 30 percent receive aid in the second phase," said Ahmadinejad, whose words play the local news agency ISNA.