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Megameallionear:  AS YOU READ THIS, PLEASE PICTURE ABADI AND CBI AND WHY THEY DO WHAT THEY DO PREPPING THE DINAR FOR A REVALUATION.

The value of national currency of each country depends on a myriad of factors among them…

Economic situation of the country in the world

efficiency of the government and securing the costs

political, legal and judicial stability for attracting foreign investments – (SAY INVESTMENT LAW AND OTHER BASKETS OF LAWS)

Observing the international law and regulation and being in line with international changes, etc.
A change in the value of currency (RV) and in its volume (MONEY COUNT AND SUPPLY), which is the result of such changes, brings about many hygienic impacts.

The phenomenon of “currency replacement” occurs when along with devaluation of national currency, people show a tendency to use foreign currencies ($$$$$$$$$$$$) for their daily exchange. The most significant use of deleting zeroes in economy is maintaining the value of national currency.

 Removing zeroes from national currency is more a political measure from the governments rather than an expert and technical one and is considered to be part of the package of economic reforms.

Removing zeroes from national currency is a tool for governments’ support of the strength of currency policies. This measure has an important role in boosting public confidence in governments.

Removing zeroes from national currency can play a significant role in re-election of a particular party.

There are different reasons behind one country’s decision to change the national currency; among them one can mention the following:

Obtaining international credit
Regaining national identity and national confidence

Controlling the currency market
Decreasing the inflation pressures
Preventing currency replacement with foreign currencies

Investigations indicate that deleting zeroes from national currency can be effective only when

The domain of macro-economy posses stability

Inflation is on the decline
Currency rate is stable
Government refrains from excessive expenditure

There is great confidence in the society in government’s policies

If a government only suffices to remove zeroes from national currency and does not execute comprehensive and sweeping economic reforms (WHICH ABADI IS TAKING CARE OF AS WE SPEAK) , not only the policy of removing zeroes from national currency will not be effective, but also value changes of the currency are doomed to happen soon – TRUST ME, WE DON’T WANT OUR RV TO BE DOOMED…

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Reasons for Removing Zeroes from the currency

Problems related to having large figures in the daily exchanges

Problems related to accounting and calculations

Insecurities in carrying large amount of money for daily exchanges

Long waits at bank lines due to the problem of counting huge amounts of money
Changing national currency due to large amounts of money

The necessity to use Iran checks with regard to the legal problems associated with it.

The high cost of issuing and destroying inflow bills considering the high volume of bills

The high rate of bill destruction due to its high volume and thus difficulty of holding them

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The advantages of removing zeros from national currency

Reducing the volume of bills

Reducing the costs of issuing and destroying bills in the country

Having simpler trades and financial balances

Strengthening national currency and its value in comparison to other currencies

Positive psychological effects in the society

Increasing its efficiency

Easier transfer of money

Possibility of having more valuable coins after deleting three zeroes by the government

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THINGS ABADI AND CBI WANT TO AVOID AT ALL COST

When deleting zeroes from the national currency is not accompanied by providing the necessary infrastructures and in a sudden manner, it will leave very unpleasant effects on people’s power of purchase.

If removing zeroes occurs when economic reforms have proved to be ineffective or when the economic stability policies are just in the mid way, no desirable results will be gained by changing the national currency.

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Disadvantages and Problems of Removing Three Zeroes from the National Currency

The risks and problems of removing zeroes can be divided as follows
:

The inflation effect resulting from rounding off the prices to higher amounts
Menu cost

Psychological effect of the decrease in salaried

The risk of sending the capitals abroad and the investors’ wait to see the result of the initiative

The return of deleted zeroes

Costs of re-issuing bills and minting new coins

Problems in determining the prices in short terms

People’s confusion in the short run and the society’s confusion until being adapted to the new condition

Devaluation of bills and appearance of inflation

Lack of relationship between number of zeroes and the value of national currency

Lack of changes in the economic process

Devaluation and loss of some bills and small coins in the daily exchanges between people

The project’s failure in case of not being supported by people

Decrease in exports as the result of increase in the value of national currency

The time of implementing the project of removing zeroes from national currency needs to be postponed to the time that it will have the highest amount of effectiveness in the country’s economy.

If implementation of this project does not occur in the appropriate time and as part of the package for reforming financial and banking system of the country, it will lose part of its effects.

IMHO…THE TIME IS NOW!!!

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