The number of readings is 4,672 Section: File and Analysis 09/26/2020 10:35
Deleting currency zeros throughout the history of the world .. Will Iraq join the list?
Baghdad / Obelisk: The economic expert, Salam Sumaisem, said that the government is now obliged to reduce the value of the Iraqi dinar against the dollar in order to obtain greater quantities of Iraqi money against the dollar without printing more, and thus preserving the currency from collapse.
In an interview with the "obelisk", Sumaisem said that in the pre-2003 era, the currency was printed without cover and in large quantities, and it was reduced without a balance.
Today, it can be reduced with a balance, indicating that this reduction increases the amount of exports because it pays people who They import from abroad to the demand for local goods, which will lead to a devaluation of the currency and the demand for it becomes more.
Several countries resorted to writing off zeros of their currency, with the aim of restoring some confidence in the national currency by trying to absorb inflation represented by high prices and the erosion of purchasing value.
And deleting zeros from the currency is the process of replacing the old currency with a new one whose price is less than the old currency by the number of zeros that will be deleted,
for example deleting three zeros from the Iraqi currency means that one dinar from the new currency is equivalent to 1000 dinars from the old currency.
And if Iran was the latest country to write off the zeros of its currency to restore confidence in the national currency by trying to absorb inflation represented by high prices and the erosion of purchasing value, then dozens of countries preceded it to measures of this kind that exceeded the number of 70 since the mid-twentieth century.
Let us know the most prominent of these cases
On Monday, the Iranian parliament responded to a bill approved by the government of President Hassan Rouhani at the end of July 2019, and referred it to the Shura Council for many months, as it was subject to extensive discussion and conflicting opinions about the feasibility of such a step, as an official in the Central Bank confirmed that deleting the zeros is supposed That it is contingent on controlling inflation first, warning that the possibility of an increase in the prices of goods and services is present, as well as the possibility of the return of zeros after several years.
The government at the time decided to delete 4 zeros from its deteriorating currency and replace the riyal with the Toman in transactions, and this was approved by Parliament,
but it is not The first time that Tehran omitted zeros, as in 2017 the central bank had to delete one zero, but this time the decision means that one million riyals will be equal to 100 riyals only.
Multiple studies indicate that cases of deleting zeros from currencies have exceeded 70 since 1960, including cases carried out by 19 countries that got rid of zeros from their currency at once, and 10 countries resorted to this step twice.
Venezuela, Brazil, Argentina, and Bolivia
The Iranian decision comes at a time of great deterioration of the riyal, as a main result of the severe sanctions applied by the administration of US President Donald Trump, which have found deep resonance in Venezuela, which is also subject to harsh sanctions.
The circulation of new notes of the Venezuelan currency began in August 2018, In the first stage of a recovery plan launched by President Nicolas Maduro, to issue the sovereign bolivar by deleting 5 zeros from the old currency.
As for Brazil, between 1930 and the beginning of the twentieth century, it got rid of 18 zeros in 6 batches, the most prominent of which was in 1993, when it suffered severely from the acceleration of inflation to the level of 2000% and eliminated 3 zeros.
Also, the recurrent great economic downturn in Argentina led its authorities to take decisions to write off zeros from its currency 4 times.
Bolivia also got rid of zeros twice.
Turkey, Iraq and Sudan
replaced Turkey the old currency by canceling 6 zeros starting in 2005 with a decision issued in 2004, so that one million pounds became equal to one lira, and it was withdrawn from circulation, and instead new currencies without zeros were introduced in the name of "New Lira" before the name was re-approved.
The lira "separately, and it gave citizens 10 years to exchange their old currencies for the new currency from the headquarters of the Central Bank.
In Iraq, in 2014, it was proposed to delete 3 zeros from the dinar, but in 2015 it was announced that a new denomination of 50 thousand dinars would be printed instead of deleting the numbers from the 1000 and 10 thousand dinars denominations.
Sudan also removed two zeros from its currency in 2007.
This country deleted 3 zeros from its currency in 2003, and after only about 6 years had passed, it decided to reduce 12 zeros, which practically means that every trillion Zimbabwean dollars became equivalent at that time to one Zimbabwean dollar!
Former Yugoslavia, Serbia crossed zeros in 5 batches,
while the Netherlands deleted 4 zeros from its currency after it issued in 1960 paper currencies with very large numbers,
and Ukraine resorted to deleting zeros 3 times, as did Russia, Poland, South Korea and Ghana.