Title: Economic Priorities: The Strategic Debate on National Currency Reform
Introduction
A longstanding discussion on the potential removal of zeros from the national currency has resurfaced among economic policymakers. While recognized as a necessary measure for long-term efficiency, experts argue that addressing persistent inflation must remain the immediate and primary focus of the government and the Central Bank.
The Case for Currency Reform
Economist Rahman Saa’dat highlighted that the proposal to remove four zeros from the national currency has been under consideration for nearly two decades. The core reason behind this initiative is the continuous inflation that has led to rising prices and a decrease in the currency’s value. Over time, this has resulted in the addition of multiple zeros, complicating large-scale transactions, reducing the speed of monetary transfers, and creating psychological barriers to price comprehension among the public.
Saa’dat emphasized that such a reform is indeed necessary from an operational and accounting perspective. However, he cautioned that its implementation requires appropriate timing and economic stability to prevent the recurrence of the same issues in the future.
Inflation: The Immediate Challenge
The most pressing economic issue, according to Saa’dat, is inflation. It accelerates capital flight, encourages speculative investments over productive ones, diminishes public welfare, and obstructs economic growth. Therefore, the primary responsibility of the government and the Central Bank should be to control and reduce inflation before undertaking structural changes like currency reform.
External factors, including international policies and challenges, have significantly influenced Iran’s economic conditions. For nearly two decades, sanctions and associated pressures have imposed considerable constraints on the economy, contributing to inflationary trends and complicating policy decisions.
Global Precedents and Economic Prioritization
Saa’dat pointed out that in the contemporary global arena, economic interests often take precedence over political considerations. Many nations prioritize economic stability and growth, even when faced with international political tensions. China, for instance, despite its strategic competition with other global powers, consistently prioritizes economic benefits when confronted with conflicting interests.
This approach, Saa’dat suggested, offers a valuable lesson: economic interests should be placed at the forefront of national policy. The government must focus on resolving economic challenges that directly impact people’s livelihoods, with inflation control being the most urgent priority.
A Call for Timing and Prudence
In conclusion, Saa’dat stressed that currency reform should only be pursued once the economy exhibits a sustained downward trend in inflation and price stability is achieved over a medium-term period. Implementing such a change prematurely, amid ongoing inflation, could lead to the same problems reemerging, with zeros being added back to the currency in the future.
For now, the focus remains on stabilizing the economy, mitigating the effects of external challenges, and safeguarding the nation’s economic interests.
