The Iranian government has approved a plan to ax four zeroes from the rial in a bid to tackle high inflation in the country. The measure was announced by an Iranian government spokesperson, Ali Rabiei, following a Cabinet meeting on Wednesday.
Iran's central bank presented the proposal to the government in early January.
The Iranian rial has plunged from 32,000 to $1 at the time of the 2015 deal to around 120,000 to $1 these days.
This has pushed inflation up, affecting the prices of everything in the country, including food and medicines. Many residents currently pay more than 1 million rial ($30, €27) for a simple trip to the grocery store.
The United States insists that medicines and humanitarian goods are exempt from the sanctions, but restrictions on trade have made many banks and companies around the world hesitant to do business with Iran, fearing punitive measures from Washington.
Iran, as a result, is cut off from the international banking system.
Tehran has tried to keep its economic situation in check by controlling foreign currency rates and cutting down on those moving their money from the rial to other currencies.
Iran's government on Wednesday also decided to rename the currency, which will now be called the toman, a former super unit of official currency that was in circulation until 1925. Iranians have for decades continued to use the term toman for its simple conversion rate: 1 toman is equal to 10 rial.
sri/rt (dpa, AP)